How raising a mortgage deposit can take 2 years in some areas — and 28 years in others

New figures show record number of new buyers getting home loans approved despite it taking years to save for deposit

Record numbers of first-time buyers are getting approved for a mortgage – despite the fact that the average time it takes to save for a deposit is now close to five years.

Figures from the banks show the number of new buyers getting approval has hit its highest level since the lenders started recording the figures in 2011.

There was a 15pc rise in the number of first-time buyer mortgage ­approvals last month when compared with last year, according to the Banking and Payments Federation Ireland (BPFI).

The banks said new buyers were now driving the mortgage market.

A total of 2,171 first-time buyer mortgages were approved last month, up 278 on the number approved in the same month last year.

This is the highest figure for February since the data series began in 2011.

A total of 3,582 mortgages were approved last month, with first-time buyers making up 61pc of the total volume, while mover-purchasers accounted for 19.4pc.

BFPI chief executive Brian Hayes said first-time-buyer demand remained very strong, with 12,355 help-to-buy applications to the Revenue Commissioners in the first two months of the year.

Separate research by price-comparison site Switcher.ie shows that the average time it takes first-time buyers to save for a deposit for a mortgage in Ireland is 4.6 years.

The figure is based on average ­annual earnings, average house prices and average household savings rates.

The median house price for first-time buyers in the 12 months to December was €340,000, Switcher.ie said.

The average first-time buyer drawdown was €282,084.

This is the highest level since records began in 2003.

Switcher’s affordability index calculates the most affordable areas for joint buyers and sole buyers based on how long it would take to save for a deposit in each various regions.

Leitrim, Longford and Roscommon have emerged as the most affordable places for first-time buyers to purchase a home.

Leitrim is the most affordable place for first-time buyers, with it taking two-and-a-half years to save for a deposit there, according to a survey by Switcher.ie.

Dún Laoghaire in south Co Dublin is the least affordable place to buy and it could take would-be buyers almost 28 years to raise a deposit.

Roscommon is the most affordable for sole buyers, taking two-and-a-half years to save for a deposit on an apartment.

The struggle for new buyers to get on the property ladder was illustrated by the fact that 60pc of Ireland’s new homes were built in the 10 most expensive regions last year, Switcher said.

This is in contrast to the cheapest areas attracting only 12pc of new dwellings.

The authors of the affordability index said this was disadvantaging first-time buyers who wanted to avail of the State’s Help-to-Buy scheme.

Dún Laoghaire, Dublin and Kildare had the majority of the new builds last year.

However, places such as Leitrim, Longford and Roscommon had only a fraction of the new house builds.

Commercial director of Switcher.ie, Eoin Clarke said that where people lived and worked dramatically ­affected earnings, savings and how long it would take them to gather a deposit.

He said the midlands counties of Roscommon, Leitrim and Longford were among the most affordable in this regard.

The western regions of Limerick and Sligo earned their place in the top 10 due to the higher salaries in the region.

Source: Charlie Weston, Irish Independent, 27th March 2024