Friday 15 December 2017

One-third of Nationwide home loans in arrears

Charlie Weston Personal Finance Editor

MORE than a third of residential mortgages issued by Irish Nationwide Building Society are in arrears, the Irish Independent has learned.

Around half of the buy-to-let mortgages issued by the society in the past few years are also in arrears.

Head of mortgages at Irish Nationwide, Martin Noonan, refused to give any breakdown of the figures. But he admitted that arrears at the beleaguered building society are higher than at other lenders.

The revelation about the arrears comes days after UCD economics professor Morgan Kelly warned of a mortgage default time bomb. He said there would be a surge in the numbers unable to repay their mortgages, which he claimed would lead to civil unrest.

Formerly run by Michael Fingleton, Irish Nationwide has around €2.1bn lent out to homeowners and to investors in buy-to-let properties. Its market share is estimated to be around 2pc, which means it has issued around 16,000 mortgages.


The arrears levels at the society are amongst the highest in the Irish market.

A spokeswoman for Irish Nationwide said: "For confidentiality reasons Irish Nationwide does not comment on mortgage customer arrears."

Only sub-prime lender Start has higher levels of arrears. They are now as high as 45pc in some cases as the residential housing market continues to slide.

The latest official figures from the Central Bank show that almost 37,000 homeowners are in arrears, as they have not paid their mortgage for three months or more.

Financial Regulator Matthew Elderfield warned on Monday that arrears figures due out in the next few weeks will show the situation has gotten worse.

"My guess is that, over time, the arrears figures are going to get worse rather than improve because of the unemployment levels," he said.


Prof Kelly has estimated that around 100,000 mortgage holders are struggling to meet their monthly repayments.

In addition to those in arrears, some 45,000 homeowners have struck deals with their mortgage lenders to reduce their repayments, by either only repaying the interest for a period or opting for a repayment holiday.

Meanwhile, it emerged yesterday that ICS Building Society has made it more difficult for first-time buyers to get home loans.

ICS, which is a subsidiary of Bank of Ireland, will require anyone taking out a mortgage on a one-bed apartment in Dublin, Limerick, Galway or Cork to have a deposit of at least 25pc of the value of the property. Up to now it only required a 10pc deposit.

For one-bed apartments in other parts of the country a deposit of 35pc will be demanded, up from 15pc of the purchase price previously.

Mortgage broker body the Professional Insurance Brokers' Association said a survey it conducted shows that up to 80pc of mortgage applications are being rejected by lenders.

Irish Independent

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