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Long-term mortgage arrears trend at lowest point since 2010

24 Jun 2020 / Ireland Print

Long-term mortgage arrears lowest since 2010

The number of mortgage accounts in arrears for principal dwelling houses increased by 2,841 accounts in Q1 2020, new Central Bank figures show.

The increase in total number of accounts in arrears was driven by a 3,827 increase in the number entering early arrears of less than 90 days.

This increase can be attributed to a combination of longer-term arrears accounts reducing, and an increase in new arrears, the Central Bank says.

However, preliminary indications are that a significant number of new arrears accounts have since reverted to having no arrears, in part owing to the introduction of COVID-19 payment breaks in the last two-three weeks of the quarter.

Reduction

There was a continued reduction in accounts in longer-term arrears with some 5.6% of all principal dwelling house accounts in arrears over 90 days at end-March.

This is the lowest level since 2010. 

Accounts in arrears over 90 days decreased by 986 over the quarter.

Similarly, accounts in arrears over 720 days decreased by 664 accounts.

Notwithstanding, accounts in arrears over 720 days continue to account for a large proportion of all accounts in arrears. At end-March 2020, such accounts represented 42% of all accounts in arrears.

Non-bank entitiesheld 13% of all principal dwelling house mortgage accounts outstanding at end-March 2020, but 55% of mortgages in arrears over 720 days.

Residential Mortgages

At end-March 2020, there were 739,592 private residential mortgage accounts in Ireland, with a value of €98 billion. 

Of this total stock, 63,437 accounts were in arrears, representing an increase of 2,841 accounts or 4.7% over the quarter.

This increase in arrears was driven by an increase in accounts in arrears up to 90 days by 3,827 accounts.

This was partly offset by decline in longer-term accounts in arrears over 90 days by 986 accounts.

At end-March 2020, some 41,079 accounts (5.6%) were in arrears of more than 90 days.

The outstanding balance on principal dwelling houses mortgage accounts in arrears of more than 90 days was €7.8 billion at end-March, or 7.9% of the total outstanding mortgage accounts.

The number of accounts in arrears over 720 days decreased by 664 accounts in Q1 2020. Accounts in arrears over 720 days accounted for 42% of all accounts in arrears at end-March.

A total stock of 81,255 family home mortgage accounts were categorised as restructured at end-March 2020.

Buy-to-let

At end-March 2020, there were 101,585 residential mortgage accounts for buy-to-let (BTL) properties held in the Republic of Ireland, to a value of €16.6 billion.

Some 16,773 BTL accounts were in arrears at end-March, an increase of 211 accounts or 1.3% over the quarter.

Of the total BTL stock, 13,476 accounts or 13.3% were in arrears of more than 90 days, reflecting a decrease of 3.1% over the quarter.

The outstanding balance on all BTL mortgage accounts in arrears of more than 90 days was €3.5 billion at end-March, equivalent to 21% balance outstanding on BTL accounts.

Total stock

A total stock of 12,312 BTL mortgage accounts were categorised as restructured at end-March 2020, a decrease of 995 accounts over the quarter.

Of the total stock of restructured accounts recorded at end-March, 81% were not in arrears, while 86% were meeting the terms of their current restructure arrangement.

A total of 515 new restructure arrangements were agreed during the first quarter of the year. 

During the first quarter of 2020, rent receivers were appointed to 351 BTL accounts, bringing the stock of accounts with rent receivers appointed to 5,180. 

Possession 

There were 615 BTL properties in the banks’ possession at the beginning of Q1 2020. 

A total of 15 properties were taken into possession by lenders during the quarter.

Of the total BTL repossessions in the quarter, two were repossessed on foot of a court order, while the remaining 13 were voluntarily surrendered or abandoned.

During Q1 2020, 111 properties were disposed of. As a result, lenders were in possession of 488 BTL properties at end-March 2020.

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