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Northern Ireland house buyers borrow £350m in three months

By John Mulgrew

Published 25/08/2016

New home buyers helped fuel an increase in mortgage lending in Northern Ireland
New home buyers helped fuel an increase in mortgage lending in Northern Ireland

The value of mortgage lending in Northern Ireland has increased by 3% in the space of three months - buoyed by first-time buyers - according to fresh figures.

Buyers here borrowed £350m during the second quarter of the year. That was up 13%, year-on-year.

They took out 3,300 loans, up 6% compared to both the previous quarter. First-time buyers borrowed £200m, up 25% on the first quarter 2016, according to the Council of Mortgage Lenders (CML).

But home-mover borrowing fell to £150m, down 17% on the last quarter.

Paddy Turley of Belfast estate agent UPS said the first-time buyer market remained strong.

"We are finding that the interest rate cut may have stimulated that a bit," he said. But he said there had been a "slight dip" in house sales for buy-to-let after new legislation on stamp study.

And in general, he said there was a lack of quality housing though first-time buyers were "doing their homework". But despite a slow July, he said the market had not been hit by Brexit.

In Northern Ireland, first-time buyers borrowed around £91,500 on average. That's well below the UK average of £132,800. Derek Wilson, CML Northern Ireland chairman, said: "This is the best performing second quarter of a year for house purchase lending in Northern Ireland since 2007, with first-time buyers really driving that rise in activity."

Sean Sheehan, regional director of Bank of Ireland, said the latest data is "confirmation that the revival in Northern Ireland's mortgage market has continued to grow".

"With other recent data suggesting that overall house transactions are flat year on year, it seems clear that some of the pent-up demand from first-time buyers, typically with a greater requirement for mortgage finance, is coming through in these numbers," said Mr Sheehan.

He said "despite some wider macro uncertainties" that "record low borrowing costs" and a pipeline of new builds would help the market grow further. Danske Bank, First Trust and Ulster Bank were unable to comment.

Meanwhile, the number of mortgage approvals across the UK fell to a one-and-half-year low in the month after the Brexit vote. Loans for house purchases slipped 5% to an 18-month low of 37,662 in July, down from 39,763 in June, figures from the British Bankers' Association said.

The CML figures come after information company Equifax said NI had the biggest slump in mortgage sales in the UK during July. It said mortgages sold through intermediaries fell by nearly 30%.

Belfast Telegraph

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