BY JOHN ELLIS, FINANCIAL ADVISOR
The housing and financial markets are experiencing significant shifts as 2025 unfolds, driven by a robust economy, people’s changing needs and reduction in interest rates.
Trevor Grant, of Irish Mortgage Advisors, notes an increase in first-time buyer mortgage approvals, signalling strong demand for home ownership. This trend, fuelled by uncertainty in the rental market, highlights the urgent need for increased housing supply to prevent runaway house price inflation.
However, the ‘market dynamics’ extend beyond first-time buyers. Grant anticipates a significant growth in the re-mortgage and switching market, driven by fixed-rate mortgages coming to an end of term, and the desire for home improvements. Trevor Grant stresses the importance of impartial, market-based advice for borrowers, emphasising that, while a customer’s bank may offer competitive terms, better options often exist elsewhere.
Despite these challenges, there are opportunities for mortgage holders with increasing property values to access better loan-to-value (LTV) ratios, allowing them to secure better mortgage terms or take advantage of lender incentives – for example, for those with energy-efficient homes, ‘green’ mortgage rates present additional savings opportunities.
Grant underscores the importance of regular mortgage reviews, especially as competition among lenders intensifies. With the potential for further rate reductions, now is an opportune time for homeowners to renegotiate their terms and lock in long-term savings.
The broader housing crisis remains a pressing issue. National house prices have risen nearly 10% over the past year, exacerbated by limited housing supply and high demand. This shortage forces first-time buyers to compete with existing homeowners, driving up prices further. The construction industry faces its own hurdles, including skill shortages and lack of labour, which contribute to escalating building costs.
Grant highlights the role of the Government and industry in addressing these challenges. The recent General Election placed housing at the forefront, with high expectations for the incoming administration to tackle housing shortages and homelessness. The need for “increased housing supply and efficient market mechanisms” is critical to stabilise prices and provide affordable options for prospective buyers.
Meanwhile, savers face a challenging environment as several providers, including Bank of Ireland, Bunq, N26, and Raisin, have reduced rates. This trend is expected to continue, with the European Central Bank (ECB) likely to further reduce rates throughout the year.
Bonkers.ie highlights the importance of initiative-taking, urging households to move their savings into higher-yielding accounts before rates drop further.
As consumers navigate these complex financial and housing landscapes, prospective homebuyers and mortgage holders should use all channels available to secure the best possible deals. Savers must act swiftly to transfer their money into higher-yielding accounts before further rate cuts erode returns.
By staying informed and being proactive, you can make calculated financial decisions to secure your future in a continuing uncertain economic environment.
086 8362633
