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.

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  4. Home-owner house purchase lending in Wales up year-on-year 25% in first quarter

Home-owner house purchase lending in Wales up year-on-year 25% in first quarter

Published: 25 May 2016

On an unadjusted basis:

  • Home-owners borrowed £850m for house purchase, down 16% quarter-on-quarter but up 29% year-on-year. They took out 6,600 loans, down 16% on the previous quarter but up 25% on quarter one 2015.
  • First-time buyers borrowed £330m, down 20% on the fourth quarter 2015 but up 22% on the same period last year. This totalled 3,000 loans, down 19% quarter-on-quarter but up 20% year-on-year. The average age of a first-time buyer is now 29 years old.
  • Home movers borrowed £530m, down 12% on the fourth quarter 2015 but up 36% compared to a year ago. This totalled 3,600 loans, down 14% quarter-on-quarter but up 29% year-on-year.
  • Remortgage activity totalled £420m, down 2% quarter four but up 20% compared to a year ago. This came to 3,700 loans, down 3% quarter-on-quarter but up 12% year-on-year

Julie Ann Haines, CML Cymru chair, commented:

The first quarter of the year typically sees a seasonal lending dip, but the year-on-year growth in activity in all lending types is encouraging. That this is the best first quarter performance for all lending types in Wales since 2007 suggests a growth period for the market. With affordability improving this quarter, supported by a generally favourable economic backdrop, we would expect further growth in lending as we go into the summer months.

Wales was the focus of a recent News & Views article Lenders welcome opportunity to help shape Welsh housing policy that took a more in-depth look at the key issues and policies affecting the market.

Wales house purchase and remortgage lending in the first quarter

While seasonal factors generally cause activity to be lower this period, this is the highest number of loans and the most borrowed for house purchase in the first quarter of the year since 2007. This was also the case for first-time buyer, home mover and remortgage activity. 

Affordability metrics for first-time buyers improved this quarter compared to the fourth quarter of 2015. The amount borrowed went from £106,000 to £104,625 and the average household income of a first-time buyers went from 32,615 to 33,092 meaning income multiple in Wales from 3.30 to 3.22. The amount home movers borrowed went from £128,795 to £130,000 and the average household income of a home movers went from 46,818 to 47,500 meaning income multiple in Wales from 2.83 to 2.85.

The amount first-time buyers are spending of their monthly gross income to service capital and interest repayments was 17.2%, which was the lowest level since we began tracking this metric in 2005. Home movers are also paying close to record low proportions of income at 16.9%, unchanged from the fourth quarter 2015 and just off the lowest since we began tracking this metric in 2005 of 16.8% in Q3 2013.

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

 20160525 Wales Q1 2016 MLT trends 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

Q1 2015

2,500

2,800

3,300

Q4 2015

3,700

4,200

3,800

Q1 2016

3,000

3,600

3,700

Change compared to Q4 2015

-18.9%

-14.3%

-2.6%

Change compared to Q1 2015

+20.0%

+28.6%

+12.1%

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

 

House purchase (£m)

Remortgage (£m)

  FTBs Movers Home owners

Q1 2015

270 390 350

Q4 2015

410 600 430

Q1 2016

330 530 420

Change compared to Q4 2015

-19.5% -11.7% -2.3%

Change compared to Q1 2015

+22.2% +35.9% +20.0%

 

 20160525 Wales first-time buyer affordability infographic

20160525 Wales home mover affordability infographic

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 2016 will be released on Wednesday 24 August 2016.

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