Belfast Telegraph

Property market surge as mortgage lending jumps by 41% in Northern Ireland

1,600 first-time buyers are given loans in just three months

By Claire McNeilly

First-time buyers and home movers helped push mortgage lending up by 41% in Northern Ireland during the first three months of 2014, compared to the same period last year, new figures have revealed.

However, lending is down by 11% when compared to the last quarter of 2013, according to the Council of Mortgage Lenders (CML).

Data contained in its latest report also showed that first-time buyers in Northern Ireland borrowed 2.91 times their gross income in the first three months of this year, which is lower than the UK average of 3.42.

The quarter-on-quarter fall in lending was an "expected seasonal dip", the CML said, while the trend over recent quarters is one of increased activity.

According to the report, the value of new loans for house purchases in the first quarter of this year was £240m, spread across 2,700 loans.

More than half of those loans – 1,600 – were to first-time buyers.

The typical loan size for first-time buyers in Northern Ireland was £72,000, which was less than the UK average of £118,750 in the same period.

Brian McCormick, chair of the CML in Northern Ireland, pointed to a "strong upward year-on-year trend in Northern Ireland, showing growth in all borrower types".

He also said it was "good to see affordability for first-time buyers remain at a more favourable level than the UK overall".

Financial Director at CPS Property, Neil Conlon, said Northern Ireland's property market was currently being driven by first-time buyers.

"It's no surprise that mortgage lending is up quite significantly in the three months to March this year," he said.

Further Reading

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Northern Ireland homeowners are sitting on a 'mortgage timebomb' 

"People are very much aware of their financial responsibilities and most are now spending between 17-20% of their income on mortgages, which is much more sustainable that during the pre-crash period."

Northern Ireland's general economic outlook appears positive for the foreseeable future following a number of upbeat reports in recent weeks.

In April, local retailers had their biggest rise in shoppers since Christmas 2012, with a 12.8% increase in the number of people passing through stores here compared to a year earlier.

That hike represents the highest recorded growth figure for the high street since December 2012, according to the Northern Ireland Retail Consortium.

New car registrations have also risen by just over a sixth in the last year – in what is seen as a telltale sign of a strengthening economy.

Meanwhile, official property statistics for Northern Ireland, which were published last week, determined that house prices here rose by 7% last year. The Residential Property Price Index (RPPI), which is compiled by the Northern Ireland Statistics and Research Agency, also showed that sales – which hit 4,200 in the first three months of 2014 – were at their strongest since the same period seven years ago, before the crash.

Finance Minister Simon Hamilton said the increasing confidence of buyers in the Northern Ireland housing market was demonstrated by the rising level of transactions, as indicated by the RPPI figures.

He said: "It is encouraging that almost 4,200 residential properties were sold during the first quarter of 2014.

"This represented a 21% increase on the number sold in the first quarter of 2013 and was the highest number of first quarter sales recorded since 2007."

House prices in Northern Ireland up by just 0.3% - lowest in UK

Northern Ireland homeowners are sitting on a 'mortgage timebomb'


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