According to the Irish Banking Federation, which collates monthly mortgage approval data from its members, statistics are collected without identifying the borrower and so could "contain instances where a borrower has obtained approval from more than one lender".Banking sector statistics on mortgage approval may be inflating the level of demand in the market for homeloans by double counting borrowers who have approval from multiple lenders and those who have applied for new loans after a previous approval has lapsed.
Mortgage brokers confirmed that reapplications after approval had lapsed (after six months) was also a common feature of the market. Both factors are believed to contribute to the disparity between mortgage approvals and drawdowns seen in the quarterly IBF housing market monitor and other statistical series.
According to the IBF, its members approved 4,408 mortgages in the second quarter, but borrowers only drew down 2,857. Approvals rose 11.9 per cent year-on-year in July to 1,875. There were 5,642 total transactions, indicating about half were for cash.The difference suggests mortgage approvals are not being used, either because buyers are being outbid or because they have more than one offer relating to the same property."The incidence of this is not quantified, but not believed to be that significant in the overall scheme of things," said Felix O'Regan, director of public affairs with the IBF. "However, it could well be a factor in explaining the divergence between the level of approvals and actual drawdowns.”