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A third more first-time buyers in Northern Ireland than a year ago

Published: 27 August 2014

New CML data on the characteristics of lending in Northern Ireland in the second quarter of 2014 show the market is has had significant house purchase and remortgage activity growth compared to the previous quarter and the same period last year.

Quarterly highlights:

  • First-time buyer loans totalled 1,800 in the second quarter in Northern Ireland - 13% up on the previous quarter, and 29% up on Q2 2013. First-time buyers in the period borrowed £150 million - up 25% on the previous quarter and 36% on Q2 2013.
  • There were 1,100 home-mover loans in the second quarter, unchanged on the previous quarter but up 22% on Q2 2013. Total value of these loans was £130 million, up 8% on the first quarter and 30% on the second quarter 2013.
  • Remortgage lending in the quarter showed growth in Northern Ireland compared to the previous quarter and the same quarter in 2013.

Lending for home-owner house purchase

House purchase lending to home-buyers increased quarter-on-quarter in Northern Ireland totalling 3,000 loans, up 11% compared to the first quarter and the value of these loans totalled £280 million, a rise of 17% on the first quarter. Compared to the second quarter of 2013, the number of loans increased 30% and value of these loans increased by 33%.     

Chart 1: House purchase lending in Northern Ireland: Year-on-year % change in Northern Ireland compared and the UK

 26.08.14 N.ireland house purchase

Source: CML

Lending to first-time buyers

First-time buyer affordability changed fractionally, with first-time buyers typically borrowing 2.90 times their gross income, less than the 2.91 in the previous quarter and the UK average of 3.46. The typical loan size for first-time buyers was £78,000 in the second quarter, up from £72,000 in the previous quarter. The typical gross income of a first-time buyer household was £26,300 compared to £25,000 in the first quarter.

First-time buyer payment burden increased to 17.7% of gross income being spent to cover capital and interest payments in the second quarter, from 16.9% in the previous quarter, remaining lower than 19.3% in the UK overall. 

Chart 2: Lending to FTBs in Northern Ireland, number of loans advanced, and lending to FTBs in Northern Ireland as a proportion of the UK total

 26.08.14 N ireland ftbs

Source: CML

Lending to home movers 

In the second quarter of 2014, lending to home movers showed similar growth patterns in Northern Ireland to first-time buyer lending. Home mover affordability changed fractionally, with home movers typically borrowing 2.47 times their gross income compared to 2.45 in the first quarter but substantially less than 3.09 for the UK overall in the period. The typical loan size for home movers was £100,000 in second quarter, up from £98,000 in the previous quarter. The typical gross household income for home movers was £40,500 in second quarter compared to £40,300 in first quarter.

Home movers' payment burden remained low in Northern Ireland compared to the UK at 17.2% of gross income being spent to cover monthly capital and interest payments, slightly up from 17.3% in Q1 and less than the 18.7% UK average.

Lending to home owners for remortgage

The number of loans advanced for remortgage in Northern Ireland, unlike the UK overall, increased both quarter-on-quarter and year-on-year. Home-owner remortgage lending in the second quarter totalled 1,300 loans advanced in the period, which was an increase of 18% on both the first quarter and on the second quarter 2013. These loans totalled £120m in value, an increase of 20% quarter-on-quarter and compared to Q2 2013.

Chart 3: Remortgage lending in Northern Ireland compared to the UK, year-on-year % change

 26.08.14 N Ireland remortgage

Source: CML

Jackie Bennett, head of policy at CML, commented: 

“There has been substantial growth in both house purchase and remortgage lending suggesting the market is in a much healthier state than it was this time last year. Affordability in Northern Ireland is currently better than in the UK overall and, with house price growth also seen over the past few months, it would suggest potential for optimism in the second half of the year.

"The introduction of new FCA rules in the second quarter had the potential to cause a period of adjustment but it does not seem to have affected the increase of borrower appetite in Northern Ireland."


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 11.1 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 third quarter of 2014 will be released on Wednesday 26 November 2014.

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