Residential Mortgage Arrears and Repossessions Statistics: Q3 2013     

Information release 28 November 2013

Summary

  • The number of mortgage accounts for principal dwelling houses (PDH) in arrears, fell from 142,892 (18.5 per cent of the total stock) to 141,520 (18.4 per cent) during the quarter to end-September 2013. The outstanding balance on all PDH mortgages in arrears fell by 0.5 per cent during Q3, the first decrease since the series began in September 2009. However, this decrease masks divergent trends between short-term and longer-term arrears.
  • PDH mortgage accounts in arrears of over 90 days at end-September 2013 amounted to 99,189, an increase of 1,315 on the previous quarter. This increase was driven entirely by accounts in arrears over 720 days with all other maturity categories declining.
  • The number of PDH accounts in early arrears of less than 90 days declined by 6 per cent during the third quarter, compared to a decrease of 3.3 per cent in Q2.
  • There was a total stock of 80,555 PDH mortgage accounts classified as restructured at end-September, reflecting a quarter-on-quarter increase of 1.5 per cent. Of these restructured accounts, 78.9 per cent were deemed to be meeting the terms of their current restructure arrangement.
  • The number of buy-to-let (BTL) mortgage accounts in arrears rose from 39,948 (26.9 per cent) to 40,426 (27.4 per cent) in the third quarter of 2013. However, similar to PDH developments, the increase was driven by longer-term arrears, with the number of accounts in arrears up to 180 days declining.
  • There were 31,227 (21.2 per cent) residential mortgage accounts for BTL properties in arrears of over 90 days at end-September 2013, up from 30,326 (20.4 per cent) at end-June 2013.

View information release with charts and data tables.

Residential Mortgages on Principal Dwelling Houses

Arrears

At end-September 2013, there were 768,136 private residential mortgage accounts for principal dwellings held in the Republic of Ireland, to a value of €108.5 billion. Of this total stock, 141,520 accounts were in arrears, (a fall of 1,372 over the quarter) and 99,189  (12.9 per cent) were in arrears of more than 90 days.[1] This compares with 97,874 accounts (12.7 per cent of total) that were in arrears of more than 90 days at end-June 2013. The outstanding balance on PDH mortgage accounts in arrears of more than 90 days was €18.9 billion at end-September, equivalent to 17.4 per cent of the total outstanding balance on all PDH mortgage accounts.

Early arrears declined significantly during the third quarter of the year. There was a quarter-on-quarter fall of 6 per cent in the number of accounts in arrears of less than 90 days, which stood at 42,331 at end-September, or 5.5 per cent of the total stock. Longer-term arrears continued to increase, however, as the number of accounts in arrears over 360 days reached 59,844 at end-September, equivalent to 7.8 per cent of the total stock of PDH mortgage accounts. All of this increase was driven by accounts in arrears of over 720 days, which now constitute 22.5 per cent of all accounts in arrears, and just over 60 per cent of arrears outstanding. The pace of increase in longer-term arrears has continued to moderate, however, and, combined with the reduction in early arrears this quarter, resulted in a decline in the overall stock of PDH accounts in arrears of 1 per cent relative to Q2 (0.5 per cent decline in value terms). Nonetheless, the value of accounts in longer-term arrears over 360 days remains large, amounting to €12 billion at end-September.

Restructuring Arrangements

Forbearance techniques include: a switch to an interest only mortgage; a reduction in the payment amount; a temporary deferral of payment; extending the term of the mortgage; and capitalising arrears amounts and related interest[2]. The figures also include a small number of modification options such as split mortgages and trade-down mortgages, which have been introduced recently to provide more long-term solutions for customers in difficulty.

A total stock of 80,555 PDH mortgage accounts were categorised as restructured at end-September 2013. This reflects an increase of 1.5 per cent from the stock of restructured accounts reported at end-June. Of the total stock of restructured accounts at end-September, 53.4 per cent were not in arrears. Restructured accounts in arrears include accounts that were in arrears prior to restructuring where the arrears balance has not yet been eliminated, as well as accounts that are in arrears on the current restructuring arrangement. At end-September, 78.9 per cent of restructured PDH accounts were deemed to be meeting the terms of their arrangement. This means that the borrower is, at a minimum, meeting the agreed monthly repayments according to the restructure arrangement. It is important to note that ‘meeting the terms of the arrangement’ is not a measure of sustainability, as not all restructure types represent longer-term sustainable solutions[3].

A total of 23,776 new restructure arrangements[4] were agreed during the third quarter of the year. The share of interest only arrangements and reduced payment arrangements (interest plus some capital) fell further during Q3, to 41.4 per cent from 49.7 per cent at end Q2 indicating a move out of short-term arrangements. Arrears capitalisations and term extension arrangements increased during the third quarter of the year, and accounted for 20 per cent and 19.2 per cent of total restructures at end-Q3, respectively. A breakdown of restructured mortgages by type is presented in Figure 2. The data on arrears and restructures indicate that of the total stock of 141,520 PDH accounts that were in arrears at end-September, 37,521, or 26.5 per cent, were classified as restructured at that time.

Legal Proceedings and Repossessions

During the third quarter of 2013, legal proceedings were issued to enforce the debt/security on a PDH mortgage in 1,830 cases. Court proceedings concluded in 361 cases during the quarter, and in 89 of these cases the Courts granted an order for repossession or sale of the property. There were 1,002 properties in the banks’ possession at the beginning of the quarter. A total of 209 properties were taken into possession by lenders during the quarter, of which 76 were repossessed on foot of a Court Order, while the remaining 133 were voluntarily surrendered or abandoned. During the quarter 158 properties were disposed of. As a result, lenders were in possession of 1,050 PDH properties at end-September 2013.

Residential Mortgages on Buy-to-Let Properties

Arrears

At end-September 2013, there were 147,610 residential mortgage accounts for buy-to-let properties held in the Republic of Ireland, to a value of €30.3 billion. Some 40,426 (27.4 per cent) of these accounts were in arrears, compared to 39,948 (26.9 per cent) at the end of the second quarter. Of this total stock of accounts, 31,227, or 21.2 per cent, were in arrears of more than 90 days, reflecting an increase of 3 per cent over the quarter. The outstanding balance on BTL mortgage accounts in arrears of more than 90 days was €8.9 billion at end-September, equivalent to 29.3 per cent of the total outstanding balance on all BTL mortgage accounts.

The number of BTL accounts that were in arrears of more than 180 days was 26,675 at end-September 2013, reflecting a quarter-on-quarter increase of 4.3 per cent. Meanwhile, the number of accounts in arrears of over 360 days increased by 5.5 per cent during Q3 2013. At end-September 2013, 20,272 BTL accounts, or 13.7 per cent of the total stock, were in arrears of over 360 days. The outstanding balance on these accounts was €6.1 billion at end-September, equivalent to 20.2 per cent of the total outstanding balance on all BTL mortgage accounts. Consistent with the trends in PDH mortgages, BTL accounts in early arrears fell by 4.4 per cent in the third quarter of the year. The number of BTL accounts in arrears of less than 90 days was 9,199 (6.2 per cent of the total stock) at end-September 2013, a fall of 423 over the quarter. Similarly, there was a fall of 187 for accounts in arrears of between 90 and 180 days – these now number 4,552 or around 3 per cent of BTL accounts.

Restructuring Arrangements

A total stock of 21,607 BTL mortgage accounts were categorised as restructured at end-September 2013, reflecting an increase of 0.2 per cent from the stock of restructured accounts reported at end-June 2013. Of the total stock of restructured accounts recorded at end-September, 60.9 per cent were not in arrears, while 77.9 per cent were meeting the terms of their restructure arrangement. A total of 5,399 new restructure arrangements were agreed during the third quarter of the year. Interest only arrangements and reduced payment arrangements (interest plus some capital) continued to account for the majority of restructures in place for BTL mortgages, although their share fell to 58.8 per cent from 62.9 per cent at end-June. The data on arrears and restructures indicate that of the total stock of 40,426 BTL accounts that were in arrears at end-September, 8,455, or 20.9 per cent, were classified as restructured at that time.

Legal Proceedings and Repossessions

There were 502 BTL properties in the banks’ possession at the beginning of Q3 2013. A total of 62 properties were taken into possession by lenders during the quarter, of which 31 were repossessed on foot of a Court Order, while the remaining 31 were voluntarily surrendered or abandoned. During the quarter 47 properties were disposed of. As a result, lenders were in possession of 516 BTL properties at end-September 2013.

Annex 1: Mortgage Arrears Data and Further Information

The mortgage arrears data, along with a set of explanatory notes, are available in the Mortgage Arrears section of the Statistics portal of the Central Bank of Ireland website: http://www.centralbank.ie/polstats/stats/mortgagearrears/Pages/Data.aspx.

The Central Bank of Ireland has produced a number of consumer guides to assist consumers who are in arrears or facing arrears, including

  • Mortgage Arrears - A Consumer Guide to Dealing with your Lender;
  • Mortgage Arrears - Frequently Asked Questions; and
  • Guide to Completing a Standard Financial Statement.

The above guides, that include information on the protections that are available to consumers in financial difficulty, are available to download from the consumer information section of the Central Bank website.

______________________________

[1] The figures published here represent the total stock of mortgage accounts in arrears of more than 90 days, as reported to the Central Bank of Ireland by mortgage lenders. They include mortgages that have been restructured and are still in arrears of more than 90 days, as well as mortgages in arrears of more than 90 days that have not been restructured.

[2] Arrears capitalisation is an arrangement whereby some or all of the outstanding arrears are added to the remaining principal balance, to be repaid over the life of the mortgage.

[3] Sustainable solutions are defined on Page 25 of the Mortgage Arrears Resolution Targets document.

[4] This includes first-time restructures and further modifications of existing restructures.