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.

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  4. Wales first-time buyer lending up 31% in second quarter

Wales first-time buyer lending up 31% in second quarter

Published: 24 August 2016

In the second quarter:

  • Home buyers borrowed £920m for house purchase, up 8% quarter-on-quarter and 11% year-on-year. They took out 7,200 loans, up 11% on the previous quarter and 7% on quarter two 2015.
  • First-time buyers borrowed £420m, up 31% on the first quarter and 24% on the same period last year. This totalled 3,800 loans, up 31% quarter-on-quarter and 19% year-on-year.
  • Home movers borrowed £490m, down 6% on the first quarter of the year but unchanged compared to the same period in 2015. This came to 3,400 loans, down 6% both quarter-on-quarter and year-on-year.
  • Remortgage activity equated to £450m, up 7% on the previous quarter and 18% compared to a year ago. This came to 4,000 loans, up 8% quarter-on-quarter and 11% year-on-year

Julie Ann Haines, CML Cymru chair, commented:

Mortgage lending in Wales in the second quarter saw highest quarterly volume of first-time buyer loans since mid-2007 and the highest volume of remortgage loans since mid-2013. Home mover lending dipped slightly but this was most likely simply a rebalancing after the previous quarter's rush ahead of the stamp duty changes in April.

The data reflects activity predating the EU referendum, so we will have to wait to see how the vote to leave will affect the market in Wales. It is likely to take time for that to be fully understood, but clearly the mortgage market is firmly open for business in Wales. 

Affordability remains steady in Wales

First-time buyers borrowed on average £108,000 this quarter, up from £104,700 the previous quarter (£132,800 was the UK average). The typical average household income of a first-time buyers went from 33,100 to £33,800 (£40,000 in the UK overall), meaning the income multiple in Wales increased to 3.31, up from 3.22 quarter-on-quarter (3.51 in the UK).

The amount the typical home mover borrowed in Wales went from £130,000 in the previous quarter to £130,800 this quarter (£167,400 in the UK overall), and the average household income of a home mover went from 47,500 to 46,000 (£56,600 in the UK). This meant income multiple in Wales went from 2.86 in the first quarter of the year to 2.96 this period (the UK average was 3.26).

The amount first-time buyers are spending of their monthly gross income to service capital and interest repayments was 17.2%, which along with the previous quarter was the joint lowest level since we began tracking this metric in 2005. Home movers are also paying 17.1% of their monthly household income, slightly above the all-time low of 16.8% recorded in the second and third quarters of 2013.

Chart 1: Number of loans to home-owners, 2007-2016

 20160824 Wales Q2 2016 press release chart one

Source: CML Regulated Mortgage Survey    

Download data

Table 1: Number of loans for house purchase and remortgage in Wales

 

House purchase

Remortgage

 

FTBs

Movers

Home owners

Q2 2015

3,200

3,600

3,600

Q1 2016

2,900

3,600

3,700

Q2 2016

3,800

3,400

4,000

Change compared to Q1 2016

+31.0%

-5.6%

+8.1%

Change compared to Q2 2015

+18.8%

-5.6%

+11.1%

Table 2: Value of loans for house purchase and remortgage in Wales

 

House purchase (£m)

Remortgage (£m)

  FTBs Movers Home owners

Q2 2015

340 490 380

Q1 2016

320 520 420

Q2 2016

420 490 450

Change compared to Q1 2016

+31.3% -5.8% +7.1%

Change compared to Q2 2015

+23.5% 0.0% +18.4%

20160824 Wales Q2 2016 first-time buyers affordability infographic

20160824 Wales Q2 2016 home movers affordability infographic

Notes to editors

1. The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 97% 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 third quarter of 2016 will be released on Wednesday 23 November 2016.

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Gareth Hill

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