The number of applications to the Government’s Help to Buy scheme in January was higher than the total for all of last year…..
The number of applications to the Government’s Help to Buy scheme soared to 7,000 in January.
The figure is more than the total number of claims recorded last year, according to the latest figures from the Banking and Payments Federation Ireland (BPFI). The tax refund scheme, which supports first-time buyers buying or building new homes, saw a 36pc increase in applications in January compared to the same time last year.
The BPFI’s latest Housing Market Monitor report also revealed that first-time buyers accounted for more than half of mortgage approvals in January this year, with total approvals valued at €1bn. In 2022, there were 52,634 mortgage drawdowns valued at €14.1bn, the highest level since 2008. Switching activity also rose last year as interest rates increased, accounting for almost 28pc of all drawdowns compared to 14pc in 2021.
The surge in mortgage market activity was attributed to the growth in housing completions last year. “Housing supply recovered significantly in 2022 with close to 30,000 house completions during the year, an increase of 45pc from 2021 and 41pc from 2019, prior to the pandemic,” BPFI chief executive Brian Hayes said. The BPFI anticipates an increase in non-purchase mortgages to slow, while the first-time buyer segment is set to drive activity due to the continuation of government support measures, such as the Help to Buy and First Home schemes, and the loosening of the Central Bank’s mortgage rules.
However, Mr Hayes warned that building costs pressure and further ECB rate increases may pose a risk to both housing supply outlook and demand for mortgages in the short- to medium-term despite the easing of inflation. The BPFI expects almost 27,000 units to be delivered this year, a fall from 2022 but similar to pre-pandemic levels.
However, a decline in building starts in recent months, as well as planning challenges, suggest that supply will continue to remain “substantially below” the estimated need for housing here, according to Goodbody Stockbrokers. “Despite the well-known concerns about the apartment sector, the housing sector is the bigger drag on commencements,” said Goodbody chief economist Dermot O’Leary.
In the three months to the end of February this year, the number of apartment commencements rose by 10pc year-on-year, while scheme housing commencements dipped by 1pc.
Whether you are looking to switch lender currently, keen to switch to a suitable fixed rate, are a first time buyer or moving home and should you have any concerns about the issues raised in this article, or investing in a buy-to-let property, why not chat to a Seaspray Mortgage adviser today about finding the mortgage or rate that’s right for you:
tel.+353 83 099 0442 or email john.finnamore@seasprayfs.ie
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References
Gordon, C. (2023) ‘Number applying for Help to Buy scheme soars to 7,000 in a month’, Irish Independent, 14 March. Available at : https://www.independent.ie/business/irish/number-applying-for-help-to-buy-scheme-soars-to-7000-in-a-month-42384644.html
(Accessed 14 March 2023).
