The value of mortgages being approved for first-time buyers has more than doubled in seven years, new banking figures show.

Almost 27,000 home loans were granted in the first ten months of this year, while the value of approvals topped €8.1bn, a record high and more than twice the figure in 2017.

Experts pointed to rising prices and the lack of available homes as the reasons behind the drastic increase.

Dr Lorcan Sirr, senior lecturer in housing at Technological University Dublin, said: “People are having to borrow more and also put in [subsidy scheme] Help to Buy and maybe shared equity as well, on top of chasing a smaller number of properties.”

Just 33% of new houses were for sale, with the majority becoming rental properties, according to recent data from selling agents, he said.

But he added: “I think that figure’s high, but either way, a third or less of new housing came to the market last year.

“The rest are being bought by investors, councils, approved housing bodies and one-off housing.

“So you have an increasing number of people, probably with higher wages and supported by things like Help to Buy, so it gives them more money to chase a smaller number of product, that’s brand new houses.

“In the second-hand market, properties for sale are very scarce.”

The problem is the shortage of properties to buy for someone either trading up or down, leaving people reluctant to put their home up for sale, which means the problem continues.

Now, families are looking to extend their current home rather than move house – and end up saving cash on the deal too, Mr Sirr said.

“Construction activity has gone up a good bit in the last year or so but it’s not translating to new houses on the ground.

“Really, I think, a lot of that is in retrofitting, extensions and small construction jobs and people are staying put.”

He added: “There are fewer houses to buy but it’s also harder for people to get a mortgage.”

However, the number of approvals rose to 26,699 in the year’s first ten months.

Brian Hayes, head of the Banking and Payments Federation Ireland which compiled the figures, said: “Our most recent figures show that there were 4,829 mortgage approvals, valued at €1,483m in October, with first-time buyers (FTBs) accounting for 61.7% of the total volume and 62.7% of the value of mortgages approved in the month.

“In fact, first-time buyer mortgage approvals have reached their highest year-to-date levels on record for both volumes and values in October 2024.

“Volumes rose to almost 27,000 (26,699) during the first ten months of the year, while the value of FTB approvals exceeded €8.1bn – more than double the level in the same period of 2017.

“While mover-purchasers account for a smaller share of approval activity with a quarter – 24.8% – of the value of mortgages approved in October, they reached their highest year-to-date values since the data series began in 2011, rising to €3.3bn.”

While buying approvals are at record levels, the number of homeowners switching mortgages is rising too.

Many homeowners are looking to move to lower-rate deals as the European Central Bank starts to unwind the sharp interest rate increases of the past two years to stamp out inflation.

Mr Hayes added: “We are also observing an upward trajectory in switching activity which grew in volume by 22.4%, year on year, in October.

“Switching volumes increased to their highest monthly level since January 2023 with 453 mortgages approved valued at €123m.”