There is fresh evidence of surging demand in the housing market with the release of new figures that show strong growth in mortgage approvals last month.

The mortgage figures, from Banking and Payments Federation Ireland (BPFI), come a day after a report revealed that prices for homes rose at an annual rate of 13% in May.

BPFI said that 4,683 mortgages were approved in May – up 7.4% compared with April. First-time buyers accounted for just over 55% of these approvals.

Restrictions affect comparison

The mortgages approved in May were valued at almost €1.2 billion, with first-time buyers again making up just over 55% of this total. The value of mortgage approvals rose by 6.5%, month-on-month.

The May figures showed an annual jump of almost 150% in volume from the same month last year, though BPFI chief executive Brian Hayes (pictured) warned that the figures should be viewed in the context of the restrictions in place in May 2020. Approvals in 2020 had fallen to the lowest level since 2017.

“While a number of COVID restrictions were lifted in May, lenders and customers had also adjusted much better to working within the restrictions, and this is clearly borne out by the figures,” he said.

'Robust'

Mr Hayes added that the annualised figures gave a better indication of the key trends. In the 12 months to May 2021, almost 49,000 mortgages worth almost €12 billion were approved.

Almost 39,000 of these loans were for first-time buyers or movers — the highest figure in any 12-month period since the data series began in 2011.

“These are significant figures, and very much signal a robust pipeline for drawdown activity later in the year,” Mr Hayes said.