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First-time buyers in Wales borrow £260m in first quarter, unchanged on last year

Published: 27 May 2015

The CML today release new data on the characteristics of lending in Wales in the first quarter of 2015, including mortgage lending to first-time buyers, home movers and remortagors.

In the first quarter of 2015:

First-time buyers in Wales borrowed £260m to purchase a house representing 2,400 loans. This was down 24% compared to the fourth quarter of 2014 in value and down 25% in number of loans. Compared to the first quarter of 2014, total number of loans was down 8% but the amount borrowed remained unchanged.

The number of home movers loans declined quarter-on-quarter to 2,700, valued at £380m, which was down 27% in volume and down 24% in value compared to the fourth quarter 2014. Compared to the first quarter of 2014, there was a decrease of 10% in volume but remained unchanged in value.

Remortgage lending remained unchanged quarter-on-quarter in both value and volume at 3,200 loans (£340m). Activity was down 6% in volume and 3% in value, when compared to the first quarter 2014.

Lending for house purchase

Home-owner house purchase in Wales in the first quarter of 2015 was 5,100 loans, which was down 26% in volume compared to the fourth quarter and down 9% compared to the first quarter of 2014. These loans totalled £630m, down 25% compared to the previous quarter and 2% down on the first quarter 2014.

Chart 1: Total number of home-owner house purchase loans advanced in Wales per quarter

Chart of total number of home-owner house purchase loans advanced in Wales per quarter

Source: CML

Lending to first-time buyers

First-time buyer affordability changed slightly in Wales quarter-on-quarter with first-time buyers typically borrowing 3.14 times their gross income, less than the 3.19 income multiple in the fourth quarter and less than the UK average of 3.37.

The typical loan size for first-time buyers was £101,095 in the first quarter, up from £100,625 in the previous quarter. The typical gross income of a first-time buyer household was £32,217 compared to £31,920 in the fourth quarter of last year.

First-time buyers' payment burden remained relatively low in the first quarter at 18.1% of gross income being spent to cover capital and interest payments, higher than the fourth quarter's 17.9% but lower than 19% UK average.

Chart 2: Total number of first-time buyer loans advanced in Wales per quarter

Chart of total number of first-time buyer loans advanced in Wales per quarter

Source: CML

Lending to home movers

Home mover affordability changed fractionally, with home movers typically borrowing 2.80 times their gross income compared 2.77 in the fourth quarter and to 3.03 for the UK overall.

The typical loan size for home movers was £123,997 in first quarter, up slightly from £123,613 in the previous quarter. The typical gross household income of a home mover was £44,823 in first quarter compared to £45,309 in the fourth quarter.

Home movers' payment burden remained relatively low in Wales at 17.3% of gross income being spent to cover monthly capital and interest payments, more than the 17.2% in the fourth quarter but considerably less than the 18.4% UK average.

Chart 3: Total number of home mover loans advanced in Wales per quarter

Chart of total number of home mover loans advanced in Wales per quarter

Source: CML

Lending to home owners for remortgage

Remortgage lending remained unchanged quarter-on-quarter in both value and volume at 3,200 loans (£340m). Compared to the first quarter of 2014, activity was down 6% in volume and 3% in value.

Chart 4: Total number of remortgage loans advanced in Wales per quarter

Chart of total number of remortgage loans advanced in Wales per quarter

Source: CML

Julie-Ann Haines, chair of CML Cymru, commented:

"There is a usual seasonal dip in the first quarter of the year and the Welsh market performance has been largely consistent with the UK overall. This is still the second best quarter one lending level, after last year, for first-time buyers and home movers since 2008.

"We predict activity will pick up heading into the summer months, and with affordability in Wales remaining better than the UK overall, with a much smaller average deposits and a lower proportion of monthly income spent on repayments, the conditions are good for those seeking to own a home."

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 £1.3 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 second quarter of 2015 will be released on Wednesday 26 August 2015.

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