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House purchase lending down in Northern Ireland in first quarter

Published: 27 May 2015

New CML data on the characteristics of lending in Northern Ireland in the first quarter of 2015 saw house purchase lending down year-on-year but remortgage lending increase. 

In the first quarter of 2015:

First-time buyers in Northern Ireland took out 1,400 loans to purchase a home, valued at £110m. This was down 35% compared to the fourth quarter 2014 by value and down 30% in number of loans. Compared to the first quarter of 2014, total number of loans decreased by 13% and the amount borrowed decreased by 8%.

Home movers saw a decrease in numbers to 1,000 loans, valued at £120m, which was down 38% by volume and down 37% by value compared to the fourth quarter. Compared to the first quarter of 2014, there was a decrease of 9% in volume and unchanged by value.

Remortgage lending remained unchanged by volume and value in the first quarter compared to the fourth quarter 2014 totalling 1,200 loans (£120m). Compared to the first quarter of 2014, activity was up 9% by volume and 20% by value. 

Lending for house purchase

Home-owner house purchase in Northern Ireland decreased in the first quarter of 2015 to 2,400 loans, which was down 33% compared to the fourth quarter 2014 and 11% down compared to the first quarter of 2014. These loans came to £230m, down 38% compared to the fourth quarter and down 4% on the first quarter 2014.

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

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

Source: CML

Lending to first-time buyers

First-time buyers in Northern Ireland typically borrowed 2.74 times their gross income, unchanged from the previous quarter but less than the UK average of 3.37.

The typical loan size for first-time buyers was £77,295 in the first quarter, down from £80,955 the previous quarter. The typical gross income of a first-time buyer household was £28,260 compared to £29,590 in the fourth quarter.

The relatively low level of interest rates saw first-time buyers' payment burden remaining relatively low in the first quarter at 16.2% of gross income being spent to cover capital and interest payments, lower than the fourth quarter's 17.0%.

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

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

Source: CML

Lending to home movers

Home mover affordability changed fractionally in the first quarter, with home movers typically borrowing 2.35 times their gross income compared 2.43 in the fourth quarter 2014 and to 3.06 for the UK overall.

The typical loan size for home movers was £103,000 in first quarter, down from £105,775 in the previous quarter. The typical gross household income of a home mover was £43,572 this period compared to £44,880 in the previous period.

Home movers' payment burden remained relatively low in Northern Ireland at 15.3% of gross income being spent to cover monthly capital and interest payments, less than the 16.0% in the previous period and considerably less than the 18.5% UK average.

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

 Chart of total number of home mover loans advanced in Northern Ireland per quarter

Source: CML

Lending to home owners for remortgage

Remortgage lending remained unchanged by volume and value in the first quarter compared to the fourth quarter 2014 totalling 1,200 loans (£120m). Compared to the first quarter of 2014, activity was up 9% by volume and 20% by value. 

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

Chart of total number of remortgage loans advanced in Northern Ireland per quarter

Source: CML

Derek Wilson, chair of CML Northern Ireland, commented: 

"Lending in the beginning of the year is usually muted, as seen in the UK overall, due to seasonal factors but there  are still encouraging signs the market is continuing to recover. This is the second best performing first quarter of a year for house purchase activity since 2007, just less than last year's level. The number of people remortgaging is higher this time than the two previous first quarters of the year, and affordability remains much better than the UK overall.

"We will likely see activity pick up as we head towards  the summer months and with competitive rates on offer there are options out there for those looking to buy a home or seek a new mortgage deal." 

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. We have recently moved to a monthly data reporting cycle for our Regulated Mortgage Survey. Previously, some lenders only reported data quarterly, and not all have yet started reported monthly. At present, our Northern Ireland data is particularly affected. This means it is likely that total lending volumes are understated for Northern Ireland, and that caution is needed in using and interpreting the data we publish, although borrower and affordability figures are unlikely to be affected. We hope this issue will be resolved by the end of 2015.

3. Source: CML Regulated Mortgage Survey

4. 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.

5. Data for the second quarter of 2015 will be released on Wednesday 26 August 2015.

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