Belfast Telegraph

Thursday 18 December 2014

Mortgages given to first-time buyers up by a third

Ulster Bank chief economist Richard Ramsey
Ulster Bank chief economist Richard Ramsey

Mortgage lending to first-time buyers in Northern Ireland has grown by nearly one-third, a body representing mortgage lenders has said.

The Council of Mortgage Lenders said the market experienced "significant" house purchase and remortgaging activity during the second quarter of the year.

Growth was strong compared to the previous quarter and the same period last year.

First-time buyer loans totalled 1,800 in the second quarter in Northern Ireland – 13% up on the previous quarter, and 29% up on the second quarter of 2013.

First-time buyers in the period borrowed £150m – up 25% on the previous quarter and 36% on the same time last year.

There were 1,100 loans made to people moving up the housing ladder during the second quarter, unchanged on the first few months of the year but up by more than one-fifth on the same period in 2013.

The total value of the loans was £130m, up 8% on the first quarter and 30% on the second quarter of 2013. Remortgaging had also grown.

Ulster Bank chief economist Richard Ramsey said the figures reveal the greatest number of first-time buyer loans in the second quarter since 2006.

But he pointed out that the 1,800 loans made was still less than three-quarters of the level of first-time buyer mortgage activity in the second quarter of 2006, when the market was starting to heat up.

And looking at both first-time buyers and movers, the number of mortgages in the second quarter reached 3,000 for the first time since the end of 2009.

Mr Ramsey said the average age of a home mover was 40.

The Ulster Bank chief economist added: "Despite the large 22% year-on-year increase in home-mover activity, it remains at extremely low levels.

"Over the last 12 months there were just 4,500 mortgages.

"Apart from the recent downturn, this represents levels last seen in the mid-1970s."

And in 2006, there had been 17,700 mortgages, Mr Ramsey said.

"This highlights the contrast between the first-time buyer (FTB) market and the home mover market.

"The FTB market has almost recouped 75% of 2006's mortgage volumes whereas the current home-mover mortgage volumes are just 25% of 2006 levels."

Jackie Bennett, head of policy at the Council of Mortgage Lenders, said: "There has been substantial growth in both house purchase and remortgage lending, suggesting the market is in a much healthier state than it was this time last year.

"Affordability in Northern Ireland is currently better than in the UK overall and, with house price growth also seen over the past few months, it would suggest potential for optimism in the second half of the year."

While the introduction of the Mortgage Market Review by the Financial Conduct Authority earlier in the year had the potential to cause a period of adjustment, "it does not seem to have affected the increase of borrower appetite in Northern Ireland," Ms Bennett added.

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