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House purchase lending in Wales increased by 9% last year with a consistent performance throughout 2014, according to the latest data from the Council of Mortgage Landers. First time buyers in Wales borrowed £330 million in the fourth quarter, unchanged compared to the third quarter in value but up 3% in number of loans. Compared to the fourth quarter of 2013, total number of loans was unchanged but the amount borrowed increased by 3%. The number of home movers loans declined quarter on quarter to 3,700, valued at £500 million, which was down 3% in volume and down 2% in value compared to the third quarter. Compared to the fourth quarter of 2013, there was a decrease of 8% in volume and down 2% in value. Remortgage lending increased quarter on quarter in the fourth quarter to 3,200 loans worth £330 million, up 3% in volume but unchanged in value on the third quarter. Compared to the fourth quarter of 2013, activity was down 16% in volume and 13% in value. In 2014 as a whole Wales accounted for 2.8% of the UK wide house purchase activity, down from 2.9% in 2013, the CML data also shows. First time buyer affordability changed slightly in Wales quarter on quarter with first time buyers typically borrowing 3.19 times their gross income, less than the 3.23 income multiple in the third quarter and less than the UK average of 3.38. The typical loan size for first time buyers was £100,625 in the fourth quarter, down from £100,800 in the previous quarter. The typical gross income of a first-time buyer household was £31,930 compared to £31,868 in the third quarter. The relatively low level of interest rates saw first time buyers' payment burden remaining relatively low in the third quarter at 17.9% of gross income being spent to cover capital and interest payments, higher the third quarter's 18.2%. Home mover affordability changed fractionally, with home movers typically borrowing 2.76 times their gross income compared 2.79 in the third quarter and to 3.03 for the UK overall. The typical loan size for home movers was £123,356 in fourth quarter, up from £121,928 in the previous quarter. The typical gross household income of a home mover was £45,310 in fourth quarter compared to £46,032 in the third quarter. Home movers' payment burden remained relatively low in Wales at 17.2% of gross income being spent to cover monthly capital and interest payments, less than the 17.5% in the third quarter and considerably less than the 18.4% UK average. ‘The Welsh market performed consistently over the last three quarters, with roughly the same number of borrowers each quarter taking out loans to buy a home. Improving wider economic conditions, aided by government schemes like Help to Buy, saw the strongest annual house purchase figures in Wales since 2007,’ said Peter Hughes, chair of CML Cymru. ‘Unlike the UK overall, Wales has also seen remortgage loans increase this quarter. This growth across the different lending… Continue reading →
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