Despite the mortgage market still recovering from the turmoil caused by Covid-19, it seems as though things are looking up. Data released by the BPFI has shed light on the ongoing developments in the mortgage market. More people are now drawing down mortgages, however the age of first-time buyers is increasing.
In a major reversal of previous trends, most first-time home buyers are now over the age of 30. The sheer cost of homes and the difficulties for younger workers with lower earnings to qualify for mortgages means new buyers are older.
This is a reverse from the situation that prevailed for years. In 2004 fewer than a third of first-time buyers were over the age of 30, but by the first half of this year 76pc of new buyers were over the age of 30. This means the share of first-time buyers in the market who were under the age of 30 has halved in the last 16 years.
Experts say this situation raises the risk that many will still be paying off a mortgage in their 60s.
The report also examines variations in drawdown volumes as well as mortgage repayments by region around the country. The median monthly mortgage repayment for first-time buyers in the first six months of this year was €841. That was more than €300 less than that for a mover-purchaser.
Dublin, the county with the highest property prices, had the highest median repayment for first-time buyers of €1,107, followed by Wicklow at €1,054, Kildare – where the median is €976 – and Meath, where it stands at €942. The counties with the two biggest cities outside Dublin – Cork and Galway – had median repayments between €800 and €900. All other regions had median repayments of less than €730.
Brian Hayes, chief executive of the Banking & Payments Federation said the figures, while welcome, contained some cause for caution. “The impact of Covid-19 restrictions continues to be felt on home loans for new properties, with existing houses accounting for close to 50% of the first-time buyer market, who in themselves account for a large majority of the overall mortgage market,” he explained.
“It’s encouraging, however, to see from the latest CSO and Department of Housing figures that there were more than 24,000 housing starts and almost 14,000 completions in the first nine months of this year,” he added.
Almost 22,000 mortgages were approved for first-time buyers and almost 10,000 for mover purchasers in that same period.
Last month, the Central Bank left its mortgage rules unchanged, however it will now let banks carry forward above-limit loans approved from one calendar year to the next. The Central Bank also announced its intention to introduce new rules for property funds.
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