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Number of house loans rises by 4% here as rest of UK is stuck in slump

By Helen Carson

Northern Ireland was the only part of the UK where the number of mortgages increased at the end of last year, it was revealed today.

The latest figures from the Council of Mortgage Lenders in Northern Ireland showed a hike in home loans by 4% in the last quarter of 2011 compared to the same period in 2010.

And in a further sign of growing confidence in Northern Ireland’s deflated housing market, first-time buyers are returning to the market with their numbers up over the year to 1,400 compared to 1,100 at the end of 2010.

They are also spending more — a total of £120m in the fourth quarter, which is up from £110m in the previous quarter and final quarter of the previous year.

The 2,500 mortgages, worth £240m, rose by 4% (by number and value) from the third quarter of the year. The number of loans represented an increase of 4% — with no change in the value — from the last quarter of 2010.

Northern Ireland bucked a UK-wide trend for mortgages which fell 5% in number and 7% in value from the previous quarter, but grew 1% in number and 3% by value compared to the last quarter of 2010.

Up to 1,800 remortgages were taken out in the province which is a 10% drop from the third quarter, but up 20% over the year — from the final quarter of 2010.

Those extending home loans borrowed £170m here at the end of last year, down 6% over the quarter but up 13% from the previous year.

Again, the local figures are slightly more impressive than the UK as a whole where remortgage lending fell 9% by number and 8% by value from the previous quarter. Over the year values increased by 8% by volume and 11% by value from the last quarter of 2010 (UK).

For 2011 as a whole, 4,900 loans were advanced to first-time buyers, worth £400m, up in number from 4,700 the previous year but the value of loans was down from £430m.

Chair of CML Northern Ireland Derek Wilson said: “The increase in house purchase loans is a much needed confidence boost to the market in Northern Ireland. Lack of job security and underlying economic uncertainty have led to a lack of demand for mortgages, particularly among movers.

“We need to try to combat the general feeling of negativity and to promote the value of the wider property market to the economy encouraging confidence to breed confidence.”

Tom McClelland, housing spokesman for the Royal Institution of Chartered Surveyors, said the increase of the last three months may be related to completions of deals agreed over the busier summer period.

“The housing market is bumping around. If you look at the auction results they are good because of high levels of sales because the prices are so low,” he said.

“There is a large amount of debt that has to be dealt with, the price falls make houses a lot more affordable for most people.”

He said lower prices were beneficial because they were more sustainable and meant more economic activity, rather than stasis created by high prices when only investors were able to buy and first-timers were frozen out.

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