This is the first release of the Quarterly Residential Mortgage Arrears Statistics since the onset of the COVID-19 pandemic in Ireland and includes reference data up to end-March 2020. As the containment measures were introduced from mid-March, the impact on these statistics is partial. Data covering developments from April to end-June 2020 are due to be published in mid-September.
- The number of mortgage accounts in arrears for principal dwelling houses (PDHs) increased in Q1 2020 by 2,841 accounts. The increase in total number of accounts in arrears was driven by a 3,827 increase in the number entering early arrears i.e. less than 90 days. This increase can be attributed to a combination of longer-term arrears accounts reducing, and an increase in new arrears. However, preliminary indications are that a significant number of new arrears accounts have since reverted to having no arrears, in part owing to the introduction of Covid-19 payment breaks in the last 2-3 weeks of the quarter.
- There was a continued reduction in accounts in longer-term arrears with some 5.6% of all PDH accounts in arrears over 90 days at end-March. This is the lowest level since 2010. Accounts in arrears over 90 days decreased by 986 over the quarter. Similarly, accounts in arrears over 720 days decreased by 664 accounts. Notwithstanding, accounts in arrears over 720 days continue to account for a large proportion of all accounts in arrears. At end-March 2020, such accounts represented 42 per cent of all accounts in arrears.
- Non-bank entities held 13 per cent of all PDH mortgage accounts outstanding at end-March 2020; however held 55 per cent of all PDH mortgages in arrears over 720 days (Table 1).
Residential Mortgages on Principal Dwelling Houses
At end-March 2020, there were 739,592 private residential mortgage accounts for principal dwellings held in the Republic of Ireland, with a value of €98 billion. Of this total stock, 63,437 accounts were in arrears, representing an increase of 2,841 accounts or 4.7 per cent over the quarter. This increase in arrears was driven by increase in accounts in arrears up to 90 days by 3,827 accounts. This was partly offset by decline in longer-term accounts in arrears over 90 days by 986 accounts. At end-March 2020, some 41,079 accounts (5.6 per cent) were in arrears of more than 90 days.
The outstanding balance on PDH mortgage accounts in arrears of more than 90 days was €7.8 billion at end-March, equivalent to 7.9 per cent of the total outstanding balance on all PDH mortgage accounts. The number of accounts in arrears over 720 decreased by 664 accounts in Q1 2020. Accounts in arrears over 720 days accounted for 42 per cent of all accounts in arrears at end-March.
A total stock of 81,255 PDH mortgage accounts were categorised as restructured at end-March 2020. Arrears capitalisation accounted for the largest share of restructured accounts at 31 per cent at end-March, while the share of accounts on temporary restructure arrangements remained low at 10 per cent.
There were 4,088 new restructure arrangements agreed during the first quarter of 2020. The data on arrears and restructures indicate that of the total stock of 63,437 PDH accounts that were in arrears at end-March, 17,492 accounts (28 per cent) were classified as restructured. The remaining 72 per cent of accounts in arrears were not part of a restructure arrangement at end-March 2020.
Some 78 per cent of restructured accounts were not in arrears at end-March 2020. At end-March, 85 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.
Table 2 shows the percentage of restructured accounts that were deemed to be meeting the terms of their arrangement at end-March 2020, broken down by arrangement type. The figures show that of the total stock of accounts in the arrears capitalisation category, some 23 per cent of PDH accounts are not meeting terms of current restructure arrangement, i.e. the arrears balance has increased since the arrangement was put in place. As the figures in Table 2 only reflect compliance with the terms of the current restructure arrangement, a higher percentage of compliance among shorter-term restructures could be expected.
Legal Activity and Repossessions
During Q1 2020, the Courts granted an order for repossession or sale of the property affecting 185 accounts. A total of 64 properties were taken into possession by lenders during the quarter, down from 102 properties in the previous quarter. Of the properties taken into possession during the quarter, the majority of properties, at 39, were voluntary surrendered or abandoned. The remainder, at 25, were repossessed on foot of a Court Order. During the quarter, 142 properties were disposed of by lenders. As a result, lenders were in possession of 917 PDH properties at end-March 2020. During Q1 2020, there were 319 mortgage accounts where legal proceedings concluded but arrears remained outstanding.
Residential Mortgages on Buy-to-Let Properties
At end-March 2020, there were 101,585 residential mortgage accounts for buy-to-let (BTL) properties held in the Republic of Ireland, to a value of €16.6 billion. Some 16,773 BTL accounts were in arrears at end-March, an increase of 211 accounts or 1.3 per cent over the quarter. Of the total BTL stock, 13,476 accounts or 13.3 per cent were in arrears of more than 90 days (Figure 3), reflecting an decrease of 3.1 per cent over the quarter. The outstanding balance on all BTL mortgage accounts in arrears of more than 90 days was €3.5 billion at end-March, equivalent to 21 per cent balance outstanding on BTL accounts.
BTL accounts in arrears greater than 720 days decreased by 0.8 per cent in the first quarter of 2020. Accounts in arrears of over 720 days numbered 10,278 or 61 per cent of all BTL accounts in arrears. The outstanding balance on these accounts was €2.8 billion at end-March, equivalent to 17 per cent of the total outstanding balance on all BTL mortgage accounts.
A total stock of 12,312 BTL mortgage accounts were categorised as restructured at end-March 2020, reflecting a decrease of 995 accounts over the quarter. Of the total stock of restructured accounts recorded at end-March, 81 per cent were not in arrears, while 86 per cent were meeting the terms of their current restructure arrangement. A total of 515 new restructure arrangements were agreed during the first quarter of the year. On the BTL side, the largest cohort of restructured mortgages were in term extension arrangements, which represented 21 per cent of all restructure arrangements. The data on arrears and restructures indicate that of the total stock of 16,773 BTL accounts that were in arrears at end-March, 2,299 (or 14 per cent) were classified as restructured.
Rent Receivers and Repossessions
During the first quarter of 2020, rent receivers were appointed to 351 BTL accounts, bringing the stock of accounts with rent receivers appointed to 5,180. There were 615 BTL properties in the banks’ possession at the beginning of Q1 2020. A total of 15 properties were taken into possession by lenders during the quarter. Of the total BTL repossessions in the quarter, 2 were repossessed on foot of a Court Order, while the remaining 13 were voluntarily surrendered or abandoned. During Q1 2020, 111 properties were disposed of. As a result, lenders were in possession of 488 BTL properties at end-March 2020.
Residential Mortgages held by Non-Bank Entities
At end-March 2020, non-bank entities accounted for 13 per cent of the total stock of PDH mortgage accounts outstanding. For BTLs, the proportion was higher at 27 per cent. Overall, non-bank entities accounted for 14 per cent of the total stock of residential mortgage accounts outstanding (PDH and BTL) at end-March 2020 (18 per cent in value terms).
For PDH mortgages held by non-bank entities, 21 per cent of accounts were in arrears over 90 days, and 16 per cent were in arrears of over 720 days (Table 5). In terms of BTL mortgages held by non-bank entities, 38 per cent of accounts were in arrears over 90 days, and 30 per cent of accounts in arrears of over 720 days (Table 6).
Non-bank entities held 19,956 restructured PDH mortgage accounts at end-March 2020, with 1,055 new restructure arrangements agreed during the quarter. Of the restructured accounts, 79 per cent were meeting the terms of the arrangement. Non-bank entities held 3,719 restructured BTL mortgage accounts, which accounted for 30 per cent of all restructured BTL mortgage accounts. Some 74 per cent of BTL mortgages were meeting the terms of the restructuring arrangement.
Some 25 PDH properties were taken into possession by non-bank entities during the quarter, down slightly on the previous quarter. Of the properties taken into possession during the quarter, 11 were repossessed on foot of a Court Order, while the remaining 14 were voluntarily surrendered or abandoned. During the quarter, 52 PDH properties were disposed of. There were 312 PDH and BTL properties in non-bank entities’ possession at the end of the first quarter of 2020.
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.
Annex 2: 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. The figures also include advanced modification options such as split mortgages and trade-down mortgages, which have been introduced to provide more long-term solutions for customers in difficulty.
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 as defined within the Mortgage Arrears Resolution Targets. For instance, short-term interest only restructures are, in general, not part of longer-term sustainable solutions. The MART sustainability targets also include a significant number of accounts in arrears which are part of a legal process. These accounts are not classified as restructured within the Mortgage Arrears Statistics. Arrears associated with such accounts are recorded in full in the data.
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 The Consumer Protection (Regulation of Credit Servicing Firms) Act 2018 (the 2018 Act) amends Part V of the Central Bank Act 1997 (the 1997 Act) to expand the activity of credit servicing, as defined in the 1997 Act, to include holding the legal title to credit granted under a credit agreement and associated ownership activities. From Q2 2019 publication, all persons / institutions availing of transitional authorisation arrangements under the 1997 Act, who were previously identified as “Unregulated Loan Owners”, will be termed “Credit Servicing Firms”.
 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 and credit service providers. 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.
 Arrears capitalisation is an arrangement whereby some or all of the outstanding arrears are effectively added to the remaining principal balance, to be repaid over the life of the mortgage.
 This includes first-time restructures and further modifications of existing restructures.
 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.
 It should also be noted that some categories reflect only a small number of arrangements, particularly in the case of BTL accounts.
 Legal proceedings record steps to repossess a property and include cases where a formal application has been made to a court to begin repossession proceedings, along with subsequent adjournments and judgement proceedings.
 Non-bank entities comprise of retail credit firms and credit servicing firms. For breakdown of arrears, repossessions, and restructures of non-bank entities by type see Tables 5 & 6 in annex 3.