New CML data on the characteristics of lending in Northern Ireland in the third quarter of 2015 breaking down mortgage lending activity for first-time buyers, home movers and remortgagors.

Lending in the third quarter 2015

  • Home-owner house purchase activity increased to 3,600 loans – up 16% on the second quarter and 6% on the third quarter in 2014.
  • First-time buyers and home movers saw similar trends to each other with both increasing quarter-on-quarter and year-on-year.
  • The number of loans for remortgage remained the same quarter-on-quarter at 1,700 loans, but up 55% in volume compared to the third quarter 2014.

Derek Wilson, CML chair for Northern Ireland, commented:

The increased house purchase activity is encouraging especially as it is driven by those purchasing their first homes. Affordability conditions are relatively good in Northern Ireland compared to the UK overall, so there is potential for further growth to close out the year.

Remortgage activity is coming from a low base after activity declined greatly post-recession, and is still only a fifth of the level it was at its peak in 2007, but four quarters in a row of growth is positive given how static it had been the past few years.



Lending for house purchase and remortgage

House purchase lending in Northern Ireland saw a quarter-on-quarter rise, by number of loans and by amount borrowed. This is the most amount borrowed in a quarter in Northern Ireland since 2007. First-time buyers continue to drive this growth in the market accounting for 56% of house purchase activity by volume.

Remortgage lending went up by over 50% year-on-year by number of loans and by amount borrowed. This means this is the highest quarterly remortgage level since 2011 in Northern Ireland.

Lending to first-time buyers

First-time buyers in Northern Ireland typically borrowed 2.76 times their gross income, down from 2.79 the previous quarter and less than the UK average of 3.44.Overall, first-time buyers borrowed more this quarter to purchase a house than any other since the first quarter of 2007.

The typical loan size for first-time buyers was £85,451 in the third quarter, up from £81,295 in the second quarter. The typical gross income of a first-time buyer household was £30,476, up compared to £30,000 in the second quarter.

The low level of interest rates saw first-time buyers’ payment burden remaining relatively low in the third quarter at 15.9% of gross income to cover capital and interest payments, lower than the second quarter’s 16.2% and the 18.4% UK average.

Lending to home movers

Alongside the last quarter of 2014, this is the highest home mover activity levels by volume and by value since 2007. Home movers in Northern Ireland typically borrowed 2.46 times their gross income, up from 2.32 compared to the previous quarter but the same as the third quarter of last year. This is compared to the UK average of 3.14.

The typical loan size for home movers was £108,072 in the third quarter, up from the previous quarter, but substantially lower than the £167,400 UK average. The typical gross income of a home movers’ household was £45,954, down compared to £46,138 in the second quarter.

Home movers’ payment burden in the second quarter saw them spend 15.0% of their gross household income to cover capital and interest payments, a slight change from 15.1% in the second quarter, but substantially lower than the 18.1% UK average.