Downward trend in mortgage revenue comes to a halt; sharp rise in number of mortgages closed among first-time buyers
Utrecht, August 22, 2023
The decline in mortgage revenue over the past three quarters is coming to a halt. In the second quarter of 2023, mortgage revenue rose 5.6% to €25 billion. This increase was strongest among first-time buyers with 13.1% amounting to €7.1 billion compared to the first quarter of 2023. With this climb, there was also a sharp increase in the number of mortgages taken out among first-time buyers.
Mortgage market recovers
The mortgage market is showing signs of recovery. Mortgage revenue rose 5.6% from €23.6 billion in the first quarter of 2023 to €25 billion in the second quarter of this year. The decline in mortgage revenue that followed the record high of mortgage sales in the second quarter of 2022 has thus been halted. First-time buyers were the lender group that increased the most compared to the first quarter, specifically by 13.1% from €6.3 billion to €7.1 billion.
Mortgage revenue in the second quarter of 2023 is 45.3% lower than in the second quarter of 2022. This nosedive can mainly be attributed to the largest decline in mortgage revenue for those refinancing since 2015: A -83.5% decline in the second quarter of 2023 compared to the second quarter of 2022.
The total number of mortgages closed also rose in the second quarter of 2023 compared to the first quarter in 2023. This number increased by 6.4% from 73 thousand to 78 thousand. Refinancers increased by 4.5% climbing from 12 to 13 thousand. Among first-time buyers, there was a sharp 13.4% uplift in the number of mortgages taken out, from 18,000 to 20,000. First-time buyers are catching up as the demand for owner-occupied homes stagnates. Housing market opportunities for first-time buyers have improved.
In contrast, the second quarter of 2023 compared to that of 2022 shows the largest recorded drop in the number of mortgages closed since the Mortgage Update first launched in 2006: A hefty -42.8%. The most notable decrease in this period is that of refinancers, namely by -78.0% from 58 to 13 thousand. The main reason for this drop is higher interest rates, which no longer make refinancing an attractive option.
NIBC strongest riser, making it into the top 10 providers for the first time
As a new entrant in the top 5 risers, NIBC's market share increased the most in the second quarter (+1.4 %-point). NIBC is thereby ranked in the top 10 largest providers. After NIBC, the market share of a.s.r. and Lloyds Bank climbed the most by +1.3 and +0.8 percentage points, respectively. Interestingly, Aegon swapped its top position among the risers for the position of biggest decliner, falling by -2.2 percentage points.
The provider landscape remains fairly stable. The top three holdings decline the most at -1.7 %-points. This is largely explained by banks' market share falling -1.6 %-points. Foreign parties rise by +0.9 %-points to the highest level since 2015. Like other parties, insurers rise as well, namely by +0.3 %-points. Finally, ‘regiepartijen’ (specially set up mortgage companies) rise +0.1 %-point.
Increase in number of efficient energy labels continues
The total number of energy label registrations increased by 3.5% in the second quarter of 2023 compared to the first quarter of 2023. Labels A, B, and C together account for 80% of the total number of registrations. One reason for this increase is the obligation to request an energy label for new construction and sales. An increase within labels A, B, and C compared to the first quarter can be seen. As of 2021, the number of homes with energy-efficient labels (A/B/C) shows a positive trend. This continues into the second quarter of 2023.
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Authors & data analysis of the IG&H Mortgage Update: