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Northern Ireland house purchase and remortgage activity up in third quarter

Published: 25 November 2015

New CML data on the characteristics of lending in Northern Ireland in the third quarter of 2015 breaking down mortgage lending activity for first-time buyers, home movers and remortgagors.

Lending in the third quarter 2015

  • Home-owner house purchase activity increased to 3,600 loans - up 16% on the second quarter and 6% on the third quarter in 2014. 
  • First-time buyers and home movers saw similar trends to each other with both increasing quarter-on-quarter and year-on-year.
  • The number of loans for remortgage remained the same quarter-on-quarter at 1,700 loans, but up 55% in volume compared to the third quarter 2014.    

Derek Wilson, CML chair for Northern Ireland, commented:

The increased house purchase activity is encouraging especially as it is driven by those purchasing their first homes. Affordability conditions are relatively good in Northern Ireland compared to the UK overall, so there is potential for further growth to close out the year.

Remortgage activity is coming from a low base after activity declined greatly post-recession, and is still only a fifth of the level it was at its peak in 2007, but four quarters in a row of growth is positive given how static it had been the past few years. 
 

Chart 1: Loans for house purchase and remortgage by value in Northern Ireland

20151125 N Ireland Q3 2015 Chart 1

 Source: CML Regulated Mortgage Survey (April 2005 onwards), CML Economics

Download the data

Chart 2: Number of loans for house purchase and proportion of FTBs and home-movers in Northern Ireland

 20151125 N Ireland Q3 2015 Chart 2

 Source: CML Regulated Mortgage Survey (April 2005 onwards)

Download the data

Table 1: Third quarter lending for home-owner house purchase and remortgage

 

Number of house purchase loans

Value of house purchase loans, £m

Number of remortgage loans

Value of remortgage loans, £m

Third quarter 2015

3,600

380

1,700

180

Change compared to second quarter 2015

16.1%

22.6%

No change

5.9%

Change compared to third quarter 2014

5.9%

11.8%

54.5%

80.0%

Source: CML Regulated Mortgage Survey (April 2005 onwards)

Lending for house purchase and remortgage

House purchase lending in Northern Ireland saw a quarter-on-quarter rise, by number of loans and by amount borrowed. This is the most amount borrowed in a quarter in Northern Ireland since 2007. First-time buyers continue to drive this growth in the market accounting for 56% of house purchase activity by volume.   

Remortgage lending went up by over 50% year-on-year by number of loans and by amount borrowed. This means this is the highest quarterly remortgage level since 2011 in Northern Ireland.

Table 2: Third quarter first-time buyer lending and affordability measures

 

Number of   loans

 

Value of   loans £m

 

Loan size   (£)

Income (£)

Loan-to-value

Loan-to-income

Interest   payment as % of income

Capital   and interest payment as % of   income

Third
quarter
2015

2,000

 

180

 

85,451

30,476

85.0%

2.76

9.1%

15.9%

Second 
quarter 2015

1,800

11.1%

 150

+20.0%

81,295

30,000

84.9%

2.79

9.3%

16.2%

Third 
quarter 2014

1,900

+5.3%

160

12.5%

80,000

29,791

84.9%

2.73

10.3%

16.2%

Source: CML Regulated Mortgage Survey (April 2005 onwards)

Lending to first-time buyers

First-time buyers in Northern Ireland typically borrowed 2.76 times their gross income, down from 2.79 the previous quarter and less than the UK average of 3.44.Overall, first-time buyers borrowed more this quarter to purchase a house than any other since the first quarter of 2007.

The typical loan size for first-time buyers was £85,451 in the third quarter, up from £81,295 in the second quarter. The typical gross income of a first-time buyer household was £30,476, up compared to £30,000 in the second quarter.

The low level of interest rates saw first-time buyers' payment burden remaining relatively low in the third quarter at 15.9% of gross income to cover capital and interest payments, lower than the second quarter's 16.2% and the 18.4% UK average.

Table 3: Third quarter home mover lending and affordability measures

 

Number of   loans

 

Value of   loans £m

 

Loan size   (£)

Income (£)

Loan-to-value

Loan-to-income

Interest   payment as % of income

Capital   and interest payment as % of   income

Third 
quarter
2015

1,600

 

190

 

108,072

45,954

75.3%

2.46

6.3%

15.0%

Second 
quarter
2015

 1,400

+14.3%

160

+18.8%

104,420

46,138

75.0%

2.32

6.4%

15.1%

Third
quarter
2014

 1,500

+6.7%

170

+11.8%

103,500

43,956

75.0%

2.46

7.8%

16.1%

Source: CML Regulated Mortgage Survey (April 2005 onwards)

Lending to home movers

Alongside the last quarter of 2014, this is the highest home mover activity levels by volume and by value since 2007. Home movers in Northern Ireland typically borrowed 2.46 times their gross income, up from 2.32 compared to the previous quarter but the same as the third quarter of last year. This is compared to the UK average of 3.14.

The typical loan size for home movers was £108,072 in the third quarter, up from the previous quarter, but substantially lower than the £167,400 UK average. The typical gross income of a home movers' household was £45,954, down compared to £46,138 in the second quarter.

Home movers' payment burden in the second quarter saw them spend 15.0% of their gross household income to cover capital and interest payments, a slight change from 15.1% in the second quarter, but substantially lower than the 18.1% UK average.

Chart 3: Number of home-owner remortgage loans in Northern Ireland

 20151125 N Ireland Q3 2015 Chart 3

Source: CML Regulated Mortgage Survey (April 2005 onwards)

Download the data

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 fourth quarter of 2015 will be released on Wednesday 24 February 2015.

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