Table of Contents
Overview
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- What you need to know
- Issues covered in this Report
Executive Summary
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- The market
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- Figure 1: Value of outstanding mortgage debt, actual, estimated, forecasted, and projected, 2014-18
- Forecast
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- Figure 2: Value of outstanding mortgage debt, actual, estimated, forecasted, and projected, 2014-24
- Market factors
- Economic growth, job creation, wage increases... but doubts, too
- RoI consumers positive on economic outlook, NI consumers less so
- A quarter of consumers could afford increased mortgage payments
- Property prices in NI and RoI recovering, but still short of peak
- Cost of mortgages comparatively high in RoI, lower in NI
- Companies and brands
- The consumer
- Mortgage ownership at 27% both in NI and RoI
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- Figure 3: Consumers who, either on their own or with their partner, currently have a mortgage on the property they live in as their main home, December 2018, NI and RoI
- Preference for fixed-rate mortgages in NI, variable rate in RoI
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- Figure 4: Type of mortgage currently held, NI and RoI, December 2018
- Many Irish consumers not considering mortgage application
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- Figure 5: Whether consumers are considering applying for a mortgage or a re-mortgage within the next 12 months, NI and RoI, December 2018
- Interest rate key when choosing mortgage lender
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- Figure 6: Factors that would influence choice of mortgage lender, November 2018
- Evidence of doubts and uncertainty in consumers’ minds
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- Figure 7: Agreement with statements relating to mortgages and mortgage providers, December 2018
The Market – What You Need to Know
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- Economic prospects broadly positive – albeit with potential pitfalls
- More optimism among RoI consumers
- One quarter of consumers could absorb increased mortgage payments
- Property prices in Ireland up in 2018
- Mortgage interest rates comparatively high in RoI, more affordable in NI
Market Size and Forecast
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- Value of outstanding mortgage debt to be almost €103 billion in 2019
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- Figure 8: Value of outstanding mortgage debt, actual, estimated, forecasted, and projected, 2014-24
- Steady growth in RoI over next five years
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- Figure 9: Value of outstanding mortgage debt, actual, estimated, forecasted, and projected, 2014-24
- Highest number of FTB mortgages in NI since 2004
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- Figure 10: Number of new mortgage loans, NI, 2016-18
- Figure 11: Value of new mortgage loans, £ million, NI, 2016-18
- Number of mortgage approvals up slightly
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- Figure 12: Mortgage approval volume, by mortgage type, RoI, November 2017 and November 2018
- Figure 13: Mortgage approval value, by mortgage type, RoI, November 2017 and November 2018
Market Drivers
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- Both economies on course for growth
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- Figure 14: Economic growth forecast, NI and RoI, 2018-23
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- Figure 15: Employment forecasts, % change, NI and RoI, 2018-23
- Figure 16: Wage forecasts, % change, NI and RoI, 2018-23
- Economic improvement anticipated in RoI, decline anticipated in NI
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- Figure 17: Whether consumers believe that the general economic condition of NI/RoI will improve, stay the same, or decline over the next 12 months, NI and RoI, December 2018
- RoI consumers more optimistic than NI consumers on personal financial situation
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- Figure 18: Whether consumers believe that their personal financial situation will improve, stay the same, or decline over the next 12 months, NI and RoI, December 2018
- Majority of consumers rating finances as ‘OK’
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- Figure 19: How consumers rate their current financial situation, NI and RoI, December 2018
- NI property prices defy expectations to rise more than 5% in 2018
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- Figure 20: House price index, NI, 2005-18
- Average property price reached £133,000 in NI in 2018 – but still rising
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- Figure 21: Average house price, £ 000s, NI, 2005-18
- RoI property prices up 6.5% in 2018, but still down 18% on 2007 peak
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- Figure 22: Residential property price index, nationwide-all property types, RoI, 2005-18
- Interest rates on new mortgages in RoI second highest in Eurozone
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- Figure 23: Retail interest rates on outstanding mortgages, %, average, up to 1 year, 1-5 years and 5+ years, RoI, 2005-18
- UK (including NI) mortgages rates lower than in RoI
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- Figure 24: Effective interest rate on new mortgages, %, January 2016-January 2019
- Figure 25: Effective interest rate on stock of outstanding mortgages, %, January 2019
Companies and Brands – What you need to know
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- Historic tracker mortgage issues continue
- HSBC and Santander grow total mortgage lending portfolio
- Technology entering the mortgage application process
- ‘No-deposit’ mortgages reintroduced to UK
Who’s Innovating?
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- Barclays Green Home mortgage offers discounts for energy efficiency
- Operators in the UK launching guarantor mortgages
- Start-up CreditLogic trying to streamline mortgage applications in RoI
Companies and Brands
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- Allied Irish Bank/First Trust
- Key facts
- Product portfolio
- Recent developments
- Bank of Ireland
- Key facts
- Product portfolio
- Recent developments
- Danske Bank
- Key facts
- Product portfolio
- Recent developments
- Halifax
- Key facts
- Product portfolio
- Recent developments
- HSBC
- Key facts
- Product portfolio
- Recent Developments
- KBC Ireland
- Key facts
- Product portfolio
- Recent developments
- Nationwide
- Key facts
- Product portfolio
- Recent developments
- Permanent TSB
- Key facts
- Product portfolio
- Recent developments
- Post Office
- Key facts
- Product portfolio
- Progressive Building Society
- Key facts
- Product portfolio
- Recent developments
- Santander
- Key facts
- Product portfolio
- Recent developments
- Ulster Bank
- Key facts
- Product portfolio
- Recent developments
The Consumer – What You Need to Know
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- More than a quarter of all Irish consumers have a mortgage
- NI consumers opting for fixed-rate, RoI consumers for variable rate
- The rate of interest most important to consumers
- Consumers unsure about lending criteria and affordability
Ownership of Mortgages
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- Over a quarter of Irish consumers have an outstanding mortgage
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- Figure 26: Consumers who, either on their own or with their partner, currently have a mortgage on the property they live in as their main home, December 2018, NI and RoI
- Figure 27: Mortgage ownership, NI and RoI, 2014-18
- Mortgage ownership highest among consumers aged 35-54
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- Figure 28: Consumers who, either on their own or with their partner, currently have a mortgage on the property they live in as their main home, by gender and age, December 2018, NI and RoI
- More than a third of married/cohabiting consumers have mortgages
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- Figure 29: Consumers who, either on their own or with their partner, currently have a mortgage on the property they live in as their main home, by marital status, December 2018, NI and RoI
- Mortgage ownership highest among full-time employees
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- Figure 30: Consumers who, either on their own or with their partner, currently have a mortgage on the property they live in as their main home, by work status, December 2018, NI and RoI
Type of Mortgage Owned
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- Fixed-rate repayment leads NI market, variable rate repayment top in RoI
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- Figure 31: Type of mortgage currently held, NI and RoI, December 2018
- Preference for fixed-rate in NI, but variable/tracker tops in RoI
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- Figure 32: Type of mortgage currently held – fixed-rate or variable/tracker rate, NI and RoI, December 2018
- Significant minority of mortgage owners are on interest-only terms
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- Figure 33: Type of mortgage currently held – repayment or interest-only, NI and RoI, December 2018
Future Intentions
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- Almost two thirds of consumers not intending on applying for a mortgage
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- Figure 34: Whether consumers are considering applying for a mortgage or a re-mortgage within the next 12 months, NI and RoI, December 2018
- Consumers aged 25-34 least likely to be not considering application
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- Figure 35: Consumers who are not considering applying for a mortgage within the next 12 months, by gender and age, NI and RoI, December 2018
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- Figure 36: Consumers who are not considering applying for a mortgage within the next 12 months, by work status, NI and RoI, December 2018
- C2DEFs most inclined to be not considering a mortgage application
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- Figure 37: Consumers who are not considering applying for a mortgage within the next 12 months, by social class, NI and RoI, December 2018
Factors Influencing Choice of Mortgage Lender
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- Rate of interest the most important factor when choosing lender
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- Figure 38: Factors that would influence choice of mortgage lender, November 2018
- Older consumers more likely than younger consumers to focus on rate of interest
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- Figure 39: Consumers who say the rate of interest is a factor that would influence their choice of mortgage lender, by gender and age, NI and RoI, December 2018
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- Figure 40: Consumers who say the rate of interest is a factor that would influence their choice of mortgage lender, by social class and gross annual household income, NI and RoI, December 2018
- Reputation and recommendations also key when choosing provider
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- Figure 41: Consumers who say selected reputation and recommendation-related factors would influence their choice of mortgage lender, NI and RoI, December 2018
- Flexibility and control appealing to significant minorities
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- Figure 42: Consumers who say selected payment flexibility-related factors would influence their choice of mortgage lender, NI and RoI, December 2018
Attitudes towards Mortgages and Related Issues
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- Lending criteria unclear
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- Figure 43: Agreement with statements relating to mortgages and mortgages providers, December 2018
- Though there's stress involved, value of professional advice doubted
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- Figure 44: Agreement with selected statements relating to mortgage advice and mortgage arrangement, December 2018
- Brexit-effects weighing heavier on minds of NI consumers
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- Figure 45: Agreement with statements relating to mortgages and Brexit-related issues, December 2018
- Little evidence of loyalty, but no inclination to switch providers
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- Figure 46: Agreement with statements relating to transparency, trust and loyalty, December 2018
- Concerns over affordability
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- Figure 47: Agreement with statements relating to mortgages, property and affordability, December 2018
Appendix – Data Sources, Abbreviations, and Supporting Information
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- Data sources
- Generational cohort definitions
- Abbreviations
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