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Better mortgage conditions have led to Northern Ireland seeing 25% more first time buyers in in the third quarter of 2014 than a year ago, according to data from the Council of Mortgage Lenders. Then figures point to significant growth in first time buyer and home mover activity with first time buyer loans 25% up on the third quarter 2013. The number of loans to home movers increased by 5%compared to the second quarter and were up 36% compared to a year ago. However, remortgage lending in Northern Ireland declined quarter on quarter in both volume and value. It also declined in number of loans compared to the third quarter of 2013. The data also showed that first time buyer affordability being favourable may account for this growth. First time buyers typically borrowed 2.73 times their gross income, considerably less than the UK average of 3.41. The typical loan size for first time buyers was £80,000 in the third quarter, unchanged from the previous quarter. The typical gross income of a first time buyer household rose to £29,768 compared to £27,009 in the second quarter. First time buyer monthly payment burden decreased to 16.2% of gross income being spent to cover capital and interest payments in the third quarter, from 17.6% in the previous quarter, remaining lower than 19.6% in the UK overall. Affordability for home movers also improved, with home movers typically borrowing 2.45 times their gross income compared to 2.5 in the second quarter but substantially less than 3.05 for the UK overall in the period. The typical loan size for home movers was £103,500 in third quarter, down from £104,000 in the previous quarter. The typical gross household income for home movers was £44,000 in the third quarter compared to £41,241 in second quarter. Home movers' payment burden remained low in Northern Ireland compared to the UK at 16.1% of gross income being spent to cover monthly capital and interest payments, slightly up from 15.9% in the second quarter but less than the 18.8% UK average. ‘Northern Ireland saw higher house purchase lending growth year on year than the UK overall in the third quarter. The Northern Irish market in 2013 was really driven by first time buyers but this year we have seen a resurgence of growth in home movers, suggesting it is becoming easier to transact,’ said Derek Wilson, chairman of CML Northern Ireland. ‘Borrowers are seeing good affordability conditions as the economy recovers, attractive rates are being offered by lenders, and there is further choice available through government schemes like Help to Buy,’ he explained. ‘Two quarters have passed since the new Financial Conduct Authority rules were introduced and they do not seem to have had any unintended consequences in the Northern Ireland market. This is not surprising given that house prices and the amount people borrow next to their household income is less than the UK average. The Northern Ireland market is open to those who aspire to be home owners,’ he added…. Continue reading →
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