From 1st July the Council of Mortgage Lenders is integrated into a new trade association, UK Finance. For the time being, all UKF mortgage information will continue to be published on this website, and UKF member-only mortgage information will only be available here.

UK Finance represents around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation takes on most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association. Please go to www.ukfinance.org.uk for wider content and updates from UK Finance.

  1. Home
  2. News
  3. Press releases
  4. Welsh first-time buyers spend less of their income on mortgage payments than rest of the UK

Welsh first-time buyers spend less of their income on mortgage payments than rest of the UK

Published: 24 August 2012

First-time home buyers in Wales spent less of their income on their initial mortgage payments than the UK as a whole, according to new figures released today by the Council of Mortgage Lenders in Wales.

Welsh first-time buyers spent 19.1% of their income on their mortgage payments in the second quarter of 2012 compared to the 19.6% overall UK average, although this was up from 18.7% in the previous quarter.

Lending to first-time buyers in Wales grew by 11% compared to the first quarter of 2012 but remained steady compared to the second quarter of 2011. By value, first-time buyers in Wales borrowed £190 million in the second quarter, up from £180 million in the previous quarter but consistent with the same period in 2011.

In the second quarter of the year, 2,100 first-time buyers took out mortgages, up from 1,900 loans in the first three months of 2012 and 2,100 loans in the second quarter of 2011.

First-time buyers number of loans and average LTV, Wales

Chart 1 - Wales 24-8-2012

Source: CML regulated mortgage survey

On average, Welsh first-time buyers continued to borrow more of their property’s value than in the UK as a whole. The average first-time buyer loan to value ratio (LTV) remained unchanged at 85% in the second quarter of 2012, higher than the overall UK figure of 80%.

The second quarter also saw a rise in the percentage of first-time buyers in Wales buying homes under £125,000. 67% of first-time buyers bought property for less than £125,000 in the second quarter of 2012, up from 63% in the first quarter and 62% in the same period of last year. This marked the highest percentage since the first quarter of 2010.

In addition to an increase in lending to first-time buyers, the number of loans advanced to home movers increased compared to the previous quarter and the second quarter of 2011.

Lending to home movers in Wales went up by 17% on the first quarter of 2012 and by 6% on the same quarter in 2011. Home movers took out 3,500 loans in the second quarter (worth £410 million) compared to 3,000 loans in the previous quarter (worth £350 million) and 3,300 loans in the second quarter of 2011 (worth £370 million).

Number of loans for house purchase year-on-year % change UK v Wales

Chart 2 - Wales 24-8-2012

Source: CML regulated mortgage survey

The increase in lending to first-time buyers and home movers led to a rise in overall house purchase lending.

Overall, 5,600 house purchase loans were advanced in Wales in the second quarter, up by 14% compared to the previous quarter and a 4% increase on the second quarter of 2011.

By value, house purchase loans totalled £600 million increasing from £530 million in the last quarter and £560 million in the second quarter of 2011.

Number of loans advanced for remortgage year-on-year % change UK v Wales

Chart 3 - Wales 24-8-2012

Source: CML regulated mortgage survey

While there was an increase in house purchase lending, remortgage lending in Wales contracted in the second quarter of 2012. Remortgage lending fell by 8% compared to the first quarter of 2012 and down by 13% on the second quarter of 2011. This was a larger drop than the rest of the UK where remortgage lending fell by 6% compared to the previous quarter and by 4% on the same period last year.

The second quarter of 2012 saw £340 million advanced to borrowers remortgaging, compared to £370 million in the first quarter and £390 million in the second quarter of 2011.

Peter Hughes, chair of CML Cymru, commented:

“An increase in house purchase lending combined with Welsh home-buyers spending less of their income on mortgage repayments than their UK-wide counterparts, are positive indicators for the housing market in Wales.

“Lower house prices in Wales compared to the rest of the UK, and the end of the stamp duty holiday, seems to have led to an increase in the percentage of first-time buyers purchasing property in the lower end of the market.

“Overall, the Welsh mortgage market is in tune with the UK as a whole: stable, but still facing challenging conditions from a variety of factors.”

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 11.2 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.

4. Data for the third quarter of 2012 will be released on Monday 26 November 2012.

Contact us

Julian Wadley

0207 4388922

Sue Anderson

0207 438 8924