Residential Mortgage Arrears and Repossessions Statistics: Q4 2012 

Information release 7 March 2013

Summary

The Central Bank today publishes the latest data on mortgage arrears, repossessions and restructures for the period ending December 2012.[1] The figures show that 94,488 (11.9 per cent) private residential mortgage accounts for principal dwelling houses (PDH) were in arrears of over 90 days at end-December, up from 91,358 accounts (11.5 per cent) at end-September 2012. This increase of 3.4 per cent in the number of PDH accounts in arrears of over 90 days is the slowest quarter-on-quarter rate of increase since these statistics were first collected in September 2009. The rate of increase in the number of PDH accounts in arrears of over 180 days also slowed, to 5.4 per cent in Q4. However, the number of accounts in the category of arrears over 720 days increased by 14.1 per cent in Q4 compared to Q3. At end-December there were 23,523 PDH mortgage accounts in arrears of over 720 days. Meanwhile, the number of early arrears cases fell during Q4. The figures show that 49,363 PDH mortgage accounts were in arrears of less than 90 days at end-December 2012, reflecting a quarter-on-quarter decline of 1.3 per cent. The data also show that 79,852 PDH mortgage accounts were classified as restructured by the mortgage lenders as at end-December 2012.

The data on residential mortgage accounts for buy-to-let (BTL) properties indicate that 28,421 (18.9 per cent) BTL accounts were in arrears of more than 90 days as at the end of December 2012. This compares to 27,018 accounts (17.9 per cent) that were in arrears of more than 90 days as at the end of September 2012. The data also indicate that 21,800 BTL mortgage accounts were classified as restructured as at end-December 2012.

View information release with charts and data tables.

Residential Mortgages on Principal Dwelling Houses

Arrears

  • At end-December 2012, there were 792,096 private residential mortgage accounts for principal dwellings held in the Republic of Ireland, to a value of €110.8 billion. Of this total stock of accounts, 94,488, or 11.9 per cent, were in arrears of more than 90 days.[2] This compares with 91,358 accounts (11.5 per cent of total) that were in arrears of more than 90 days at end-September 2012. The outstanding balance on PDH mortgage accounts in arrears of more than 90 days was €17.5 billion at end-December, equivalent to 15.8 per cent of the total outstanding balance on all PDH mortgage accounts.
  • The figures for Q4 show a continuation of the divergent trends in early arrears and longer-term arrears. There was a quarter-on-quarter decline of 1.3 per cent in the number of early arrears cases during the fourth quarter of the year. The number of PDH mortgage accounts in arrears of less than 90 days was 49,363 at end-December, or 6.2 per cent of the total stock. However, the number of accounts in arrears of over 360 days increased by 9.1 per cent during Q4. At end-December 2012, 51,352 PDH accounts, or 6.5 per cent of the total stock, were in arrears of over 360 days. Just under half of these were in arrears of more than 720 days. The outstanding balance on these PDH accounts in arrears over 720 days was    €4.8 billion at end-December, equivalent to 4.3 per cent of the total outstanding balance on all PDH mortgage accounts.

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[3]. The figures also include a small number of new loan modifications recently introduced by mortgage lenders with the aim of providing longer-term and more sustainable solutions for customers in financial difficulty.
  • There was a total stock of 79,852 PDH mortgage accounts that were categorised as restructured at end-December 2012. This reflects a decrease of 2.2 per cent (almost 1,800 accounts) from the stock of restructured accounts reported at end-September. This development was driven by a fall in the number of temporary restructure arrangements, such as payment moratoria, interest only arrangements and other forms of reduced payment arrangement. However, while the total stock of restructured accounts has fallen, the number of permanent restructure types (which include term extension, arrears capitalisation, permanent interest rate reduction, split mortgages and trade down mortgages) increased in Q4 by approximately 13 per cent relative to Q3.
  • Of the total stock of restructured PDH mortgages at end-December, 42,031 were not in arrears. The remaining 37,821 restructured accounts were in arrears of varying lengths. These 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. Being in arrears does not necessarily imply that the terms of the restructure arrangement are not being met, as an arrears balance may have been carried forward into the new arrangement. Restructured accounts that are not in arrears may have previously had an arrears balance which has since been eliminated, or they could be ‘pre-arrears’[4] cases.
  • The data on arrears and restructures indicate that of the total stock of 143,851 PDH accounts that were in arrears at end-December 2012, 37,821, or 26 per cent, were classified as restructured at that time.
  • Interest only arrangements and reduced payment arrangements (interest plus some capital) continue to account for the majority of all restructure types (approximately 59 per cent). A breakdown of restructured mortgages by type is presented in Figure 2.

Legal Proceedings and Repossessions

  • During the fourth quarter of 2012, legal proceedings were issued to enforce the debt/security on a mortgage in 238 cases. Court proceedings concluded in 178 cases during the quarter, and in 111 of these cases the Courts granted an order for repossession or sale of the property.
  • There were 947 properties in the banks’ possession at the beginning of Q4. A total of 134 properties were taken into possession by lenders during the quarter, of which 38 were repossessed on foot of a Court Order, while the remaining 96 were voluntarily surrendered or abandoned.
  • During the quarter 178 properties were disposed of. As a result, lenders were in possession of 903 PDH properties at end-December 2012.

Residential Mortgages on Buy-to-Let Properties

Arrears

  • At end-December 2012, there were 150,344 residential mortgage accounts for buy-to-let properties held in the Republic of Ireland, to a value of €31.1 billion. Of this total stock of accounts, 28,421, or 18.9 per cent, were in arrears of more than 90 days. This compares with 27,018 accounts (17.9 per cent of total) that were in arrears of more than 90 days at end-September 2012. The outstanding balance on BTL mortgage accounts in arrears of more than 90 days was €8.4 billion at end-December, equivalent to 26.9 per cent of the total outstanding balance on all BTL mortgage accounts.
  • The number of accounts that were in arrears of more than 180 days was 23,659 at end-December 2012, reflecting a quarter-on-quarter increase of 7.4 per cent. This compares to an increase of 11 per cent recorded in Q3, relative to Q2. Meanwhile, 7,754 BTL accounts, or 5.2 per cent of the total stock, were in arrears of more than 720 days at end-December. The outstanding balance on these accounts was €2.5 billion, equivalent to 8.1 per cent of the total outstanding balance on all BTL mortgage accounts.
  • There was a moderate quarter-on-quarter decline of 0.9 per cent in the number of early arrears cases during the fourth quarter of the year. The number of BTL mortgage accounts in arrears of less than 90 days was 9,534 at end-December, or 6.3 per cent of the total stock.

Restructuring Arrangements

  • There was a total stock of 21,800 BTL mortgage accounts that were categorised as restructured at end-December 2012. This reflects a decrease of 1.7 per cent (382 accounts) from the stock of restructured accounts reported at end-September.
  • Of the total stock of restructured mortgages at end-December 13,469 were not in arrears. The remaining 8,331 restructured accounts were in arrears of varying lengths.
  • The data on arrears and restructures indicate that of the total stock of 37,955 BTL accounts that were in arrears at end-December, 8,331, or 21.9 per cent, were classified as restructured at that time.
  • Interest only arrangements and reduced payment arrangements (interest plus some capital) accounted for the majority of all BTL restructure types (approximately 72 per cent).

Legal Proceedings and Repossessions

  • There were 408 BTL properties in the banks’ possession at the beginning of Q4. A total of 88 properties were taken into possession by lenders during the quarter, of which 22 were repossessed on foot of a Court Order, while the remaining 66 were voluntarily surrendered or abandoned.
  • During the quarter 42 properties were disposed of.  As a result, lenders were in possession of 454 BTL properties at end-December 2012.

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.

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] Please note that the introduction of a new collection system in recent months has resulted in some changes to previous quarters’ data. Further details are provided in the relevant sections of the release. In particular, there have been a number of changes to Q3 2012 data, due to reclassification issues. In all such cases, the adjustments made to Q3 2012 data allow us to make like-for-like comparisons with Q4 2012 data, ensuring that all quarter-on-quarter growth rates quoted here are meaningful.

[2] 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.

[3] 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.

[4] ‘Pre-arrears’ refers to cases in which the account has not fallen into arrears but the borrower anticipates future difficulty and agrees a forbearance arrangement with the lender.