Mortgage Update | Q1 – 2020 | Strong first quarter due to an increasing number of people taking out refinancing and additional loans

By Hypotheekupdate, Mortgage Update, News

Utrecht, 18 May 2020 – The number of mortgages during the first quarter of 2020 grows by 22.8% compared to the first quarter of 2019. Also, the average mortgage value has increased, which has led to an increase in mortgage revenue by 28.4%. This shows that the COVID-19 crisis has not negatively influenced the mortgage industry during the first quarter of 2020. 

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‘The strong growth is mainly driven by customers that are willing to refinance and take out additional loans. Additionally, we see that the average mortgage value continues to grow. Those two factors accelerate the total mortgage revenue growth.’ according to Joppe Smit of management consulting firm IG&H. The average mortgage value currently amounts to 337.000 euros, which means that it has increased by 2.8% compared to the 4th quarter of 2019. The average mortgage value continues to increase for all groups, but the strongest growth (+5.4% compared to Q4 2019) can be found among existing homeowners who transfer to a new home. This indicates that the Dutch mortgage market has not yet faced the inevitable downturn caused by the COVID-19 pandemic. 

The amount of people that refinance and take out additional loans continues to grow
The major share of mortgages is still taken out by existing homeowners transferring to new homes, but the people that refinance their mortgage or take out additional loans have almost caught up with the transferors. The group of transferors expands increasingly (+45.9% compared to Q4 2019), while the first group displays a lower level of growth (+10.0% compared to Q1 2019). This results in a growth rate of 22.8% compared to Q1 2019 for the entire market. “The accelerated growth in transfers could be a response to an increasing interest caused by the COVID-19 pandemic. This group wants to utilize this window of opportunity while it lasts.” according to Joppe Smit. 

Downward momentum continues for banks
Banks, and specifically the top-3 banks, have not yet been able to reverse the existing downward momentum in Q1 2020. Their market share has decreased for a second quarter in a row. This means that the top-3 banks have a cumulative market share of 47.9%, which is the lowest point since 2016. Investment funds that enable non-bank lending take advantage of the downward momentum of banks by accumulating a market share of 19.9%. Munt continues to have the highest growth and secures the 4th spot. ING and Florius experience the strongest decrease this quarter. The downward spiral that Florius is currently facing, has made them fall outside the top 10. 

Industry collective Duurzaam Wonen
IG&H is one of the supporting organisations that have recently launched the industry collective Duurzaam Wonen. More than 80 organisations have joined forces to foster awareness for sustainable housing among customers. To increase awarenessmortgage advisors will receive formal education on sustainability. The collective aims to educate at least 80% of the mortgage advisors in sustainability by the end of 2020For the first time, IG&H reports about the activities and progress of this collective and will continue doing so every quarter. To date, 4,900 advisors have applied and, of which, 3,100 have successfully completed this programme. This implies that an additional 3,000 advisors must complete this programme to meet the industry collective’s goal for 2020 (10,000 advisors in total). 

We wish you great joy in reading this article and would like to invite you to respond! 

Joppe Smit
Director at IG&H
E: joppe.smit@igh.com
T: 06 2035 2438

Authors & data-analysis IG&H mortgage update
Annelies Stemfoort (annelies.stemfoort@igh.com)Brenno Baas (brenno.baas@igh.com) 

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IG&H Mortgage Update | Insights from Q4 2019 and an annual review of 2019

By Banking, Mortgage Update, News

Utrecht, March 5, 2020 – New figures from Kadaster (The Netherlands’ Cadastre, Land Registry and Mapping Agency) show that growth in the mortgage market continued in the fourth quarter of 2019. This is mainly caused by the mortgage revenue increase among people taking out refinancing and additional loans. In the fourth quarter of 2019, the number of mortgages issued to this group grew by 26.1% compared to the preceding quarter. Over the whole of 2019, the mortgage market rose to a record high of €128 billion.

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“This surprisingly strong growth is caused by a rise in the number of mortgages as well as a mortgage loan increase,” says IG&H Consultancy’s Joppe Smit. In 2019, the average mortgage loan increased by 6.5%, reaching € 326,000 – its highest point since 2006. Compared to 2018, the number of mortgages increased by 13.4% to 392,000 mortgages taken out. This growth is mainly caused by an increase in the number of mortgages among people taking out refinancing and additional loans (+35.9% compared to 2018).

First-time homeowners lag behind
The mortgage revenue among first-time homeowners fell by 1.4% in the fourth quarter. Compared to the third quarter of 2019, the number of mortgages taken out by first-time homeowners fell by 3.2%. The average mortgage loan among first-time homeowners, however, increased by 1.9% to €276,000, while it dropped among existing homeowners and those taking out refinancing and additional loans. “The number of mortgages only fell among first-time homeowners, and the average mortgage loan only increased among the same group,” says Joppe Smit. “This illustrates the difficult position they’re in.”

The majority of those taking out a mortgage is still made up of existing homeowners – with a market share of nearly 46%. However, those taking out refinancing and additional loans come increasingly closer with a market share of nearly 36%. Compared to the third quarter of 2019, the number of mortgages taken out, in particular, rose significantly (+26.1%) among those taking out refinancing and additional loans. Among existing homeowners, growth is less significant (+6.9%) compared to the third quarter of 2019.

Growth of Aegon’s and Munt’s market shares
In the fourth quarter of 2019, banks lost a market share (-4.7 percentage points) among all groups of people taking out mortgages. Investment funds enabling non-bank lending benefited from this decline and grew their market share (+4 percentage points). “What’s notable is that the market share of the top 3 banks dropped to 48.9%, hitting the lowest level since 2016,” says Joppe Smit.

This quarter, there were several noteworthy shifts in the top 10 providers. Aegon and Munt moved up 3 spots, taking the 5th and 6th spot. MUNT Hypotheken increased by 2.2%, marking the highest increase in the market. As a result, it has strengthened its position in the top 10 of mortgage lenders. The biggest losers in the market were Florius (-1.9%) and Volksbank (-1.2%), which dropped to the 7th and 9th spots, respectively.

We hope you enjoy reading the Mortgage Update and welcome your response!

Sincerely,

Joppe Smit
Director at IG&H
E: joppe.smit@igh.com T: 0031 6 2035 2438

IG&H Mortgage Update
Authors & data analysis:
Annelies Stemfoort (annelies.stemfoort@igh.com), Brenno Baas (brenno.baas@igh.com)

Corrected Kadaster figures
Due to shortcomings in data provided previously, Kadaster corrected and then re-provided figures over the whole of 2019. The figures included in this Mortgage Update are based on the new figures. After consultation, we also corrected one mortgage lender’s production figures, as these didn’t include a significant part of the production – even after Kadaster’s correction.

 

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2019 – Q3 | Mortgage market revival

By Banking, Mortgage Update, News

Utrecht, November 7, 2019 – The revival of the mortgage market results in the best third quarter since 2007. Mortgage revenue grows across the market by 15.1% compared to the previous quarter to €28 billion. This marks the market’s recovery from the shrinkage in the first six months of the year.

“The strong third quarter ensures the market comes close to the level of top year 2018 on an annual basis,” says Joppe Smit from consultancy firm IG&H. Revenue growth in the past quarter is caused by a rise in the number of mortgages as well as a mortgage loan increase. Compared to the second quarter, the number of mortgages increased by 12.8% to 85,000. The average mortgage loan rose to a new record high of €324,000.

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Growth among first-time homeowners
Remarkably, the number of mortgages among first-time homeowners also increased (+1.8%), while revenue even rose by 17.2% compared to the previous quarter. This is caused by a strong mortgage loan increase for first-time homeowners. “A possible explanation is that first-time homeowners are older, which means they can afford a higher mortgage loan,” says Smit.

Existing homeowners remain the largest group of those who take out a mortgage with a 46% share. Furthermore, those taking out refinancing and additional loans once again contribute significantly to the growth of the mortgage market (+ 16.5% compared to Q2). Therefore, this group continues to grow, which means it is increasingly important for mortgage lenders to focus on it.

Growth in market share of ABN AMRO and Florius
The market share of banks as a whole, as well as that of the Top 3 Bank Holding, grows at the expense of investment funds enabling non-bank lending. With a 65.9% market share, banks reach the highest market share since 2013, despite a shrinkage of ING and Rabobank. Determining factors for this growth are the increase in banks’ market share among those taking out refinancing and additional loans as well as the substantial growth of ABN AMRO and Florius in the past quarter. A possible explanation is that ABN AMRO has an above-average share of production in the growing group of those taking out refinancing and additional loans.

You can read more about these developments in the appendix, where you can also find the Mortgage Update. We hope you enjoy reading it and welcome your response!

Sincerely,

Joppe Smit
Director at IG&H
E: joppe.smit@igh.com T: 0031 6 2035 2438

IG&H Mortgage Update – authors & data analysis performers:
Niels Roelofs (niels.roelofs@igh.com); Annelies Stemfoort (annelies.stemfoort@igh.com)

IG&H Dutch Mortgage Update: Mortgage market growth caused entirely by refinancers

By Banking, Mortgage Update, News

Dutch mortgage revenues grew in 2018 from 101 billion euros to 106 billion euros, according to consultancy bureau IG&H’s Dutch Mortgage Update. Compared to the fourth quarter of 2017, the number of mortgages shrinked considerably (8.7 percent). That was the largest decrease since the fourth quarter of 2013. As a result, the full growth in the mortgage market has come entirely from people who are not moving to new homes.

The number of mortgages also fell throughout 2018; by 2,1 percent to a total of 346.000. The average mortage sum few by  grew by 7.2% to 306,000 euros; the highest ever. Whilst the number of starters and existing homeowners in the market fell, the number of refinancers grew from 78,000 to 96,000 in 2018. This makes it the highest number ever. “These signs point to mortgage lenders not succeeding in retaining their existing customers”, says Joppe Smit, senior manager at IG&H. “These signs point to mortgage lenders not succeeding in retaining their existing customers.”

Lowest mortgage revenue growth fourth quarter 2018

The total mortgage revenue during the fourth quarter of 2018 was 28 billion euros; a growth of 2.2% over the third quarter. This is the lowest growth rate during this period since 2011.

Smit: “In previous years, there was additional market growth during the final quarter. This year we will not see as much of this. The lower number of granted mortgages and the smaller growth of the mortgage sums play a role in this. Moreover, the maximum lending capacity in past years was lowered at the end of the year, which always ensured extra volume during the final quarter. The lowering of the capacity did not happen this year.”

The shares of major banks during the final quarter sank to 50%, the lowest point in 3 years. Refinancers were responsible for 8.4 billion euros of the total mortgage revenue during the final quarter. The shares of starters (€5.9 billion) and existing homeowners (€13.8 billion) fell by 12 and 15 percent respectively compared to the fourth quarter of 2017. Foreign parties rose slightly to 4,7 percent. Both the largest grower and shrinker is an insurer this quarter. The market share of Nationale Nederlanden increases by 2.05 percent, while Aegon surrenders 3.31 percent.

Written by: Joppe Smit (Senior Manager), Lisa Klein Goldewijk (Banking Consultant) and Niels Roelofs (Banking Consultant).