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Highest quarterly house purchase lending in Northern Ireland since 2009

26 Nov 13

Highest quarterly house purchase lending in Northern Ireland since 2009

The number of loans advanced for house purchase in Northern Ireland grew to its highest levels since 2009 in the third quarter of 2013. The data released by the CML today shows there has been an increase in lending to first-time buyers, home movers and remortgagors that has continued the upward trend in Northern Ireland over the last two quarterly periods.

Lending for house purchase

A total of 2,800 loans worth £240m were advanced to home owners for house purchase in Northern Ireland in the third quarter of 2013. This represented an increase of 22% compared to both the previous quarter and the third quarter of 2012.

First-time buyers

A total of 1,600 loans were advanced to first-time buyers in the third quarter of 2013. This was an increase compared to the second quarter of 14% and up 23% compared to the third quarter last year.

Loans to first-time buyers had a total value of £120m up from £110m advanced in quarter two and up 20% compared to quarter three last year.

First-time buyers borrowed, on average, £70,000 this quarter, a slight dip from £71,050 last quarter.

The amount borrowed by first-time buyers relative to their income was 2.76 times their income (compared to 2.81 times the last quarter) but this still remains much lower than the UK average of 3.36.

The majority of first-time buyers in Northern Ireland, 75% compared to the 40% UK average, bought properties valued at less than £125,000, and therefore would have avoided paying any stamp duty. This proportion is considerably higher than the 7% of first-time buyers in Northern Ireland who were exempt from stamp duty in the third quarter of 2007 [18% overall in 2007].

Chart 1: Lending to FTBs in Northern Ireland, number of loans advanced, and lending to FTBs as a proportion of the UK total

26.11.2013 NI FTBS v2

Source: CML regulated mortgage survey

Home movers

There has been a return to growth in home mover lending, with 1,100 loans advanced in the third quarter, up from 900 in the second quarter of 2013 and up from 1,000 in quarter three of 2012. The total value of loans to home movers was £120m in the third quarter, an increase from £90m in quarter two of 2013 and larger than the £110m advanced in the third quarter last year.

Despite the increase in lending, home movers in Northern Ireland still only accounted for 39% of the house purchase market in quarter two which is lower than the 55% UK average.

Chart 2: House Purchase lending in Northern Ireland, number of loans advanced, and house purchase lending in Northern Ireland as a proportion of the UK total (1 year moving average)

26.11.2013 NI house purchase v2

Source: CML regulated mortgage survey

Remortgages

Lending for remortgages picked up a little in the third quarter in Northern Ireland, with £110m advanced to borrowers, up 10% compared to the second quarter of the year and the third quarter last year.

Chart 3: Remortgage lending in Northern Ireland: Year-on-year % change in Northern Ireland and the UK

26.11.2013 NI remortgage v3

Source: CML regulated mortgage survey

Brian McCormick, chair of the CML in Northern Ireland, commented:

"Higher lending across all borrower types is a positive sign that the recent stability we have seen in the market is helping to increase activity.

"First-time buyers have been a key driver in the first half of the year, and still continue on an upward trajectory. But, crucially, we have seen a pick up in the previously stagnated home mover and remortgage sectors, which is a good sign going forward." 

Notes to editors

1. The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 95% of all residential mortgage lending in the UK. There are 11.3 million mortgages in the UK, with loans worth over £1.2 trillion.

2. Source: CML Regulated Mortgage Survey

3. The Council of Mortgage Lenders does not publish statistics for mortgage approvals. The data in our monthly Regulated Mortgage Survey and gross lending press releases relate to mortgage advances only. A mortgage approval is the firm offer to a customer of a specific amount of credit secured against a particular property. A mortgage advance is the total amount of loan actually provided to the buyer, by the lender. Please see the mortgage statistics timeline on our website for further information.

4. Data for the fourth quarter of 2013 will be released on Wednesday 26 February 2014.

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