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Province likely to share in the UK mortgage frenzy during rush for deals

By Margaret Canning and Vicky Shaw

Published 18/09/2015

The number of people buying homes has boosted the bonanza
The number of people buying homes has boosted the bonanza

Northern Ireland is likely to be sharing in a UK mortgage bonanza which took hold in August, with figures at their highest for that month since 2007, the Council of Mortgage Lenders (CML) has said.

A rush of people looking to snap up cheap re-mortgage deals over the summer, as well as people buying homes, contributed to the strong figure.

And a spokesman for CML said Northern Ireland's house movers, remortgagers and first-time buyers were likely to be sharing in the mortgage boom - despite a fall in home loans in the second quarter.

According to separate figures from the CML earlier this month, mortgage lending here was down 9% in the second quarter of this year, compared to the same period in 2014.

But the CML spokesman yesterday said the slump was likely to be a blip for the province, following particularly high numbers of mortgages in the province in the second quarter of 2014.

UK-wide, mortgage lending in August was slightly down on July's lending total of £21.7bn, but 12% higher than August last year, when loans totalling £17.8bn were handed out.

A mortgage price war had broken out between lenders, with many slashing the rates on their deals to the lowest they have ever offered.

But there have recently been some signs of lenders starting to tweak their rates upwards, and speculation about the possibility of the Bank of England base rate rising from its record 0.5% low, prompting some mortgage holders to lock into a cheap deal before it disappears.

Bob Pannell, CML chief economist, said: "Mortgage lending is currently enjoying its best spell since 2008, on the back of a pick-up in house purchase and remortgage activity over the summer months.

"August's lending of £20bn marks the third month in a row of strong year-on-year growth and is the highest August figure since 2007.

"We expect further modest growth for the rest of the year, although affordability pressures are likely to limit gains for first-time buyers and home movers."

Mark Harris, chief executive of mortgage broker SPF Private Clients, said despite fears that some of the best of the fixed-rate mortgage deals had already gone, "lenders have good capacity to lend, with five-year deals still available at less than 2.5%".

He said that the mortgage market remains "over-supplied", with lenders having more money to lend than there are people looking for mortgages, meaning lenders will have to keep the rates they are offering competitive.

Mr Harris said: "With talk of a rate rise on the horizon, and some excellent deals available, it is a good time to re-mortgage and the number of borrowers doing so is rising accordingly."

CML's figures for the second quarter in Northern Ireland said mortgage deals were up 11% to 3,000 during the second quarter of the year, compared to the first three months of 2015.

But the number of loans was down 9% on the same period last year, while the value of the loans made was down 6.3% to £300m. And half-year loans of 5,700 were still 57% below a 2006 peak of 13,200. First-time buyer loans in Northern Ireland showed the steepest fall of 15% to 1,700 loans.

Belfast Telegraph

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