Latest Irish residential mortgage arrears & repossessions have shown that mortgage arrears have continued to fall according to latest statistics released by the Central Bank of Ireland in Q2 2018.  The number of accounts in arrears over 720 days continued to fall, and Q2 2018 marked the twelfth consecutive decline.  Accounts in arrears over 720 days now constitute 42 per cent of all accounts in arrears, and at €2.5 billion, represent 91 per cent of arrears balances outstanding.

The number of mortgage accounts for principal dwelling houses (PDHs) in arrears over 90 days continued to decline in Q2 2018, marking the nineteenth consecutive quarter of a fall in the number of accounts in this category. The number of PDH mortgage accounts that were classified as restructured at end-June was 116,010. Of these restructured accounts, 87 per cent were deemed to be meeting the terms of their current restructure arrangement, a slight increase on last quarter. Non-bank entities now hold 7 per cent of all PDH mortgage accounts outstanding; 5 per cent are held by regulated retail credit firms with the remaining 2 per cent held by unregulated loan owners. Unregulated loan owners hold 18 per cent of all PDH mortgages in arrears over 720 days. 

At end-June 2018, there were 725,693 private residential mortgage accounts for principal dwellings held in the Republic of Ireland, to a value of €98.2 billion. Of this total stock, 66,479 accounts were in arrears, representing a decrease of 5,345 accounts or 7.5 per cent over the quarter. Some 46,008 accounts (6.3 per cent) were in arrears of more than 90 days.

The number of accounts in arrears over 90 days fell by 5.2 per cent over the quarter, marking the nineteenth consecutive decline in this category. The outstanding balance on all lenders’ PDH mortgage accounts in arrears of more than 90 days was €9.5 billion at end-June, equivalent to 9.7 per cent of the total outstanding balance on all PDH mortgage accounts.

The number of accounts in arrears over 360 days fell to 35,272 at end-June, equivalent to 5 per cent of the total stock of PDH mortgage accounts and representing a fall of 2,076 accounts over the quarter. For all institutions, the value of accounts in longer-term arrears over 360 days remains large, amounting to just over €7.8 billion at end-June 2018.

The number of accounts in arrears over 720 days declined by 1,272 accounts in June, or 4.3 per cent. This was the twelfth consecutive decline in this category. Accounts in arrears over 720 days now constitute 42 per cent of all accounts in arrears, and at €2.5 billion represent 91 per cent of arrears balances outstanding.

A total stock of 116,010 PDH mortgage accounts were categorised as restructured at end-June 2018. This reflects a reduction of 1,324 accounts compared to end-March 2018. The share of accounts on interest only arrangements and reduced payment arrangements remained low at end-June,at a combined 9 per cent, indicating a continuing move out of short-term arrangements. In contrast, the number of mortgage accounts with split mortgages increased over the quarter, accounting for nearly one quarter of all restructure accounts at end-June. Arrears capitalisation continued to account for the largest share of restructured accounts at 33 per cent at end-June. A breakdown of restructured mortgages by type is presented in Figure 2.

A total of 7,857 new restructure arrangements were agreed during the second quarter of 2018, the highest level of new agreements since end-2016. The data on arrears and restructures indicate that of the total stock of 66,479 PDH accounts that were in arrears at end-June, 24,210 (36 per cent) were classified as restructured at that time. Of the total stock of 46,008 PDH accounts that were in arrears of more than 90 days, 23 per cent were classified as restructured.

Some 79 per cent of restructured accounts were not in arrears at end-June 2018. 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-June, 87 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 current restructure arrangement.

During the second quarter of 2018, legal proceedings were issued to enforce the debt/security on 437 PDH mortgage accounts. During Q2 2018, there were 403 mortgage accounts where court proceedings concluded but arrears remained outstanding. In 243 accounts, the Courts granted an order for repossession or sale of the property. A total of 245 properties were taken into possession by lenders during the quarter, down from 321 properties in the previous quarter. Of the properties taken into possession during the quarter, the majority of properties, at 144, were voluntary surrendered or abandoned. The remainder, at 101, were repossessed on foot of a Court Order. During the quarter, 236 properties were disposed of by lenders. The number of properties in possession at the end of the quarter was also impacted by reclassifications. As a result, lenders were in possession of 1,702 PDH properties at end-June 2018.

At end-June 2018, there were 118,234 residential mortgage accounts for buy-to-let (BTL) properties held in the Republic of Ireland, to a value of €20.9 billion. Some 21,317 (18 per cent) of these accounts were in arrears, compared to 22,545 accounts at end-March 2018, reflecting a decrease of 5.4 per cent over the quarter. Of the total BTL stock, 17,394 or 15 per cent were in arrears of more than 90 days, reflecting a decrease of 5.3 per cent over the quarter. The outstanding balance on all BTL mortgage accounts in arrears of more than 90 days was €4.7 billion at end-June, equivalent to 22 per cent of the total outstanding balance.

The number of BTL accounts that were in arrears of more than 180 days was 16,099 at end-June 2018, reflecting a quarter-on-quarter fall of 5.5 per cent. BTL accounts in arrears greater than 720 days decreased by 4.7 per cent in the second quarter of 2018. Accounts in arrears of over 720 days now number 12,732 or 60 per cent of all BTL accounts in arrears. The outstanding balance on these accounts was €3.6 billion at end-June, equivalent to 17 per cent of the total outstanding balance on all BTL mortgage accounts.

A total stock of 19,834 BTL mortgage accounts were categorised as restructured at end-June 2018, reflecting a decrease of 1,442 accounts over the quarter. Of the total stock of restructured accounts recorded at end-June, 82 per cent were not in arrears, while 88 per cent were meeting the terms of their current restructure arrangement. A total of 1,110 new restructure arrangements were agreed during the second quarter of the year, an increase on the previous quarter. On the BTL side, the largest cohort of restructured mortgages was in arrears capitalisation arrangements, which represented 21 per cent of all restructure arrangements. The data on arrears and restructures indicate that of the total stock of 21,317 BTL accounts that were in arrears at end-June, 3,613 (or 17 per cent) were classified as restructured.

During the second quarter of 2018, rent receivers were appointed to 802 BTL accounts, bringing the stock of accounts with rent receivers appointed to 5,915; this is down from 5,935 accounts in the previous quarter. There were 1,766 BTL properties in the banks’ possession at the beginning of Q2 2018. A total of 177 properties were taken into possession by lenders during the quarter. Of the total BTL repossessions in the quarter, 104 were repossessed on foot of a Court Order, while the remaining 73 were voluntarily surrendered or abandoned. During Q2 2018, 168 properties were disposed of. The number of properties in possession at the end of the quarter was also impacted by reclassifications. As a result, lenders were in possession of 1,773 BTL properties at end-June 2018.

At end-June 2018, non-bank entities accounted for 7 per cent of the total stock of PDH mortgage accounts outstanding. For BTLs the proportion was higher at 12 per cent. Overall, non-bank entities accounted for just over 7 per cent of the total stock of residential mortgage accounts outstanding (PDH and BTL) at end-June 2018 (9 per cent in value terms).

In terms of PDH mortgages held by non-bank entities, 75 per cent were held by regulated retail credit firms at end-June 2018. For retail credit firms, 15 per cent of accounts were in arrears over 90 days, with 8 per cent in arrears of over 720 days . The equivalent figures for unregulated loan owners was 51 per cent and 42 per cent, respectively. Restructuring activity continued to be lower among retail credit firms, with 19 per cent of loans restructured at end-June, compared to 23 per cent for unregulated loan owners.

In terms of BTL mortgages held by non-bank entities, 51 per cent of BTL accounts were held by retail credit firms. For retail credit firms, 22 per cent of accounts were in arrears, with 17 per cent of accounts in arrears of 720 days. The number of BTL accounts in arrears for unregulated loan owners was particularly high, with 81 per cent of accounts in arrears, and 66 per cent of all accounts in arrears over 720 days at end-June 2018.

Non-bank entities held 9,491 restructured PDH mortgage accounts. Of those accounts held by retail credit firms, 75 per cent were meeting the terms of the arrangement. For unregulated loan owners, this was lower at 63 per cent. Non-bank entities held 660 restructured BTL mortgage accounts, which accounted for just 3 per cent of all restructured BTL mortgage accounts. About half of BTL mortgages held by unregulated loan owners were meeting the terms of the restructuring arrangement.

There were 430 properties in non-bank entities’ possession at the end of the second quarter, with 112 properties held by retail credit firms, and 318 held by unregulated loan owners.  Some 47 properties were taken into possession by non-bank entities during the quarter, up slightly from 43 properties in the previous quarter. Of the properties taken into possession during the quarter, 35 were repossessed on foot of a Court Order, while the remaining 12 were voluntarily surrendered or abandoned. During the quarter, 57 properties were disposed of.