The Central Bank said today the number of
Irish mortgage accounts in arrears for principal dwelling houses (PDH)
by 3.3% to 136,564 in the fourth quarter of 2013 from 141,269 at
the end of the third quarter. This represents 17.9% of the total
mortgage market. However, accounts 360 days+ in arrears grew
The value of PDH mortgages in arrears was €24.4bn.
said that the number of mortgages in arrears of less
than 90 days fell by 5.7% during the fourth quarter compared to a
fall of 5.5% in the third quarter.
However, longer term arrears continued to increase with the
number of mortgages in arrears for over 360 days reaching 60,422 -
7.9% of the total stock of mortgage accounts.
Within this category,
accounts in arrears of over 720 days, rose by 1,755 to 33,589 and
represent 24.6% of all accounts in arrears.
At end-December 2013, there were 145,530 residential mortgage accounts for
buy-to-let properties held in the Republic of Ireland, to a value of €29.7bn.
Some 39,250 (27 per cent) of these accounts were in arrears, compared to 40,396
(27.4 per cent) at the end of the third quarter. Of this total stock of
accounts, 30,706, or 21.1 per cent, were in arrears of more than 90 days,
reflecting a decrease of 1.5 per cent over the quarter. The outstanding balance
on BTL mortgage accounts in arrears of more than 90 days was €8.7 billion at
end-December, equivalent to 29.2 per cent of the total outstanding balance on
all BTL mortgage accounts.
Central Bank data:
Residential Mortgage Arrears and Repossessions
Statistics: Q4 2013
Dermot O'Leary, chief economist of Goodbody
commented -- "Arrears trending downwards…Mortgages in arrears over
90 days (in both value and value terms) fell for the first time since the crisis
began in Q4 2013, indicating that stress in the system is easing, albeit from
very high levels. In Q4, the value of arrears over 90 days fell to 19.6% of
total mortgages, down from 20.0% of total in Q3 2013 (from 14.2% to 14.0% in
volume). Adding in restructured mortgages, the total rises to 27.1% of total,
representing a fall from 27.3% in Q3.
…with both BTL and owner occupier arrears falling in Q4: While
arrears on the Buy-to-Let book remain substantially larger, there were similarly
positive trends in both books. There were 40.4% of BTL mortgages (by value) in
arrears over 90 days or restructured in Q4 2013, down modestly from Q3 2013
(40.4%). This is first fall since the series began in June 2012. There were
23.4% of the owner-occupier book in arrears over 90 days or restructured, down
from 23.6% in Q3.
Large legacy issues remain to be dealt with: There are still large
legacy issues that the banks have to deal with in the coming quarters.
Specifically, the only category of arrears that experienced an increase in the
quarter was “over 720 days”. In Q4 2013, there were 46,000 accounts in arrears
of over 720 days with total arrears outstanding of €2.3bn. This highlights the
need for realistic sustainable solutions to be put in place for those in late
Questions remain about appropriateness of restructuring solutions:
Recent quarters have seen a shift in the type of restructuring solutions being
put in place by the banks. At the end of December, arrears capitalisation was
the most popular solution (22% of total), followed by interest-only (19%),
reduced payment (18%) and term extension (18%). The biggest change over the past
12 months has been the move away from interest-only to arrears capitalisation
and term extension."
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