N.I and Wales house purchases down on 2011
In Northern Ireland advances reached 2,300 which is the highest quarterly total for the year, an increase of 21% on quarter two, but fell by 4% on quarter three advances in 2011.
And in Wales there were 5,900 house purchase loans advanced in the third quarter up 5% on the second quarter but 5% lower compared to the same period last year.
Derek Wilson, chair of the CML in Northern Ireland, said: “Even though house purchase lending was slow compared to the same period last year this year’s quarter-on-quarter results show that there are some signs of resilience emerging from the market.”
And the rate of growth in Northern Ireland outstripped the UK which currently stands at 16%.
By value, house purchase loans in Wales in quarter three were worth £650 million an increase of 8% on the previous quarter but down by 3% compared to the third quarter of 2011.
While £210 million was advanced in Northern Ireland for house purchase loans up from £170 million in the previous quarter.
Driving the increase of house purchase advances was a boost in the number of both first-time buyers and home movers.
A total of 1,300 first-time buyers bought their first home in Northern Ireland in the third quarter up from 1,100 loans in the second quarter (a quarterly increase of 18%) but unchanged from the same period last year.
First-time buyers in typically put down a deposit of 17% in the third quarter which was slightly less than the second quarter at 19% and lower than the UK at 20%.
An increase in home movers in the third quarter also contributed to the rise in house purchase lending. There were 1,000 loans advanced to home movers in the quarter up from 900 in the second quarter but down slight from 1,100 loans advanced in the same quarter last year.
A total of 1,000 first-time buyers in Northern Ireland bought properties valued at less than £125,000 which is below the threshold for paying stamp duty.
This reflects the reduction in property values in Northern Ireland and represented 77% of all first-time buyers compared to around 40% in the UK.
Wilson added: “While house prices have fallen further in Northern Ireland than the rest of the UK this has benefitted those entering the market with lower entry costs enabling more first-time buyers to take their first step onto the property ladder.”
Remortgage lending fell in the third quarter to £300 down by 14% compared to the second quarter and by 32% compared to the third quarter last year representing a larger fall than in the UK overall.
Loans to first-time buyers rose in the third quarter to 2,300 representing a 10% increase compared to the second quarter but unchanged from the same period last year.
The average LTV for first-time buyers remained unchanged compared to the first two quarters of 2012 at 85%. This compared favourably with the rest of the UK where first-time buyers typically borrowed 80% of the properties value.
Peter Hughes, chair of CML Cymru, said: “The launch of a mortgage indemnity scheme earlier this month should help people to access higher LTV mortgages from spring next year, but as with the Funding for Lending scheme, it will take some time before we can assess the full impact.”
Lending to first-time buyers in Wales totalled £220 million in the third quarter up from £200 million in the previous quarter.
Adam Davies, founder of the Cardiff-based mortgage specialist InTouch Financial Solutions, said: “The mortgage market is airborne once again – but with such instability in the housing market, there could easily be more turbulence ahead.
“But while lenders are offering many more higher LTV loans lending criteria are as tough as ever and many would-be buyers are continuing to sit on their hands for fear that the worst is not yet passed in the housing market.”
The average LTV for first-time buyers remained unchanged compared to the first two quarters of 2012 at 85%. This compared favourably with the rest of the UK where first-time buyers typically borrowed 80% LTV.