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Northern Ireland mortgage market continues to show steady growth in house purchase activity

THERE were 2,700 new first-time buyer mortgages completed in Northern Ireland in the third quarter of 2018 – some 3.8 per cent more than in the same quarter of 2017, data from UK Finance has revealed.

The £280,000 of new lending was 7.7 per cent more year-on-year, the report said, adding that the average Northern Ireland first-time buyer is 30 and has a gross household income of £33,000.

There were 1,800 new home-mover mortgages completed in the north in the third quarter, 5.9 per cent more than last year and worth £240,000

Derek Wilson, chair of UK Finance’s regional mortgage committee, said: “The Northern Ireland mortgage market continues to show steady growth in house purchase activity.

“Lending to first-time buyers remains the largest sector by value, as borrowers take advantage of what continues to be the most affordable region in the UK.

“These figures underline the importance of boosting housing supply to meet this growing demand.”

Patrick Mullan, head of mortgages at Danske Bank, said: “The latest survey shows the market continues to grow steadily, with mortgage activity for first-time buyers, home movers and remortgagers in Northern Ireland all showing healthy increases from the same quarter last year, despite consumer confidence having been dented by ongoing uncertainty around the economic and political outlook.

“This consistent growth has been reflected in our own figures, which showed a 29 per cent uplift in new to bank mortgage lending across all borrower types in the third quarter when compared with a year ago.

“The first-time buyer market continues to demonstrate sustained growth and is the largest sector by value, with activity in the quarter up 3.8 per cent year on year.

“The strength of the first-time buyer market is also mirrored in Danske Bank’s own figures, with the bank now lending to one in four of all first-time buyers in Northern Ireland.

“The competitive deals on offer from many lenders and house-builders continuing to invest in new housing stock, could help explain the sustained growth in the first-time buyer market.”

He added: “While the Bank of England has said it will only raise interest rates very gradually, there is an expectation rates will increase at some point in 2019, which may drive further demand for fixed rate mortgages.

“We are seeing more people take out fixed rate mortgages, with increased demand for five-year fixed mortgages rather than shorter two-year deals, which may also be influenced by the current uncertainty around the possible impact of Brexit on the economy.

“There has been a steady increase in the number and value of home-owner remortgages compared with the same quarter last year, but we believe there is still room for further growth in this segment of the market into next year.

“In general, this survey indicates the housing market in Northern Ireland is still growing. We are still the UK’s most affordable region, so even as house prices continue to rise, these increases are reasonable and there is capacity for further sustainable growth going forward.”

Source: Irish News

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Remortgaging remains high but house purchase lending falls

There were more first-time buyers than home movers in June and house purchase lending was down on the same month last year, according to UK Finance’s Mortgage Trends Update.

A total of 34,900 new first-time buyer mortgages were taken out in June, 3.6% fewer than in the same month a year earlier. They collectively borrowed £5.8 billion, which is down 1.7% year-on-year. The average first-time buyer is 30 and has a gross household income of £42,000.

The number of new home mover mortgages completed in the month stood at 33,700, a drop of 7.9% compared to June last year.  Total new lending to home movers was £7.3 billion, down 6.4% on the previous year. The average home mover is 39 and has a gross household income of £56,000.

Remortgaging fared better, rising by 8.4% year-on-year to 37,400 new remortgages completed valued at £6.8 billion, a rise of 13.3%.

In the buy-to-let space, house purchase continued to decline in June while remortgaging remained steady.

There were 5,400 new buy-to-let home purchase mortgages completed in the month, 19.4% fewer than in the same month a year earlier. By value this was £0.8 billion of lending, a fall of 11.1 per cent.

Buy-to-let remortgages completions stayed at 12,600 and by value this was £2 billion of lending, the same as June 2017.

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Jackie Bennett, director of mortgages at UK Finance, said: “Remortgaging continued to dominate in June with figures up 13% on the same period last year as existing two and three year products came to an end and borrowers opted for new deals.

“Despite a boost in recent months, speculation of a base rate rise saw the market remain relatively subdued with year-on-year declines in activity among both first-time buyers and home movers as customers adopted a ‘wait and see’ approach.

“House price inflation has moderated in recent months yet it still remains above earnings growth, and so affordability is still a challenge for would-be borrowers.

“And although the full impact has yet to be felt, tax and regulatory changes continue to bear down on borrowing activity in the buy-to-let purchase market.”

Source: Mortgage Finance Gazette

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First-time buyers and home movers get pre-summer lending boost

The mortgage market experienced a pre-summer boost in May as lending to first-time buyers and home movers increased, figures suggest.

Data from banking trade body UK Finance shows that the number of approvals for first-time buyer mortgages increased 8.1% annually to 32,200, while home mover loans increased 4.4% to 31,100 over the same period.

Remortgaging continued to see a climb, up 7.1% annually in May to 36,000.

There was still little respite for landlords, though, with approvals for buy-to-let mortgages down 9.8% annually to 5,500.

Jackie Bennett, director of mortgages at UK Finance, said: “The mortgage market is seeing a pre-summer boost, driven by a rise in the number of first-time buyers and strong remortgaging activity. It is also particularly encouraging to see an increase in home movers, after a period of relative sluggishness in this important segment of the market.

“However, affordability remains a challenge for some prospective buyers and this is reflected by a gradual increase in loan to income multiples.

“Meanwhile purchases in the buy-to-let market continue to be constrained by recent regulatory and tax changes, the full impact of which have yet to be fully felt.”

John Phillips, group operations director at Just Mortgages and Spicerhaart, described the data as “the most encouraging for some time”.

He said: “We are starting to see a glimpse of some of the strong first-time buyer activity of 2017, and even more encouragingly, an uplift in home mover activity. This section of the market has been really slow of late, with affordability and a lack of houses making it tough for second and third steppers to make their next move.

“However, while these figures are encouraging, it could be more to do with a pre-summer boost than a real step change. Because overall, more needs to be done to help home movers.”

Source: Property Industry Eye

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Remortgage activity bounces back in April

The latest mortgage trends report from UK Finance has shown a surge in both homeowner and buy-to-let remortgages, which one expert described as ‘Blitz Spirit’.

UK Finance’s latest Mortgage Trends Update revealed there was strong growth in remortgaging in April 2018.

New homeowner mortgages were up 36 per cent and buy-to-let remortgages were up 32.4 per cent compared to the same month a year earlier.

James Tatch, analytics expert at UK Finance, said the figures showed mortgage lending operating in a way that the group had previously described as a two-speed market.

He said: “In this case house purchase is relatively slow (strong first-time buyer numbers offsetting continuing weak activity where homeowners are looking to move) whilst remortgaging is showing strong year-on-year increases.”

There were 40,800 remortgages in April, a 36 per cent increase on the same month a year ago.

Mr Tatch said the remortgaging activity was driven by a fear of coming rate hikes, along with a number of relatively attractive deals currently on the market.

The first-time buyer figures were particularly strong.

There were 26,700 new first-time buyer mortgages completed in the month, some 3.5 per cent more than in the same month a year earlier.

The £4.4bn of new lending in the month was 4.8 per cent more year-on-year, the figures showed.

The average first-time buyer is now borrowing 3.62 times their salary and getting 84.9 per cent of the purchase price of £167,000, UK Finance reported.

The average age of a first-time buyer is now 30 and he or she has a gross household income of £42,000.

Mike Scott, chief property analyst at estate agent Yopa, said that despite the slight increase in first-time buyer mortgage sizes, these mortgages are still relatively affordable.

He said: “The average first-time buyer now borrowing 3.62 times their salary and getting 84.9 per cent of the purchase price of £167,000.

“However, these mortgages are still quite affordable, with first-time buyers’ mortgage repayments averaging only 17.2 per cent of their household income, which is actually less than the 17.5 per cent average for all homemovers.

“The biggest obstacle remains the need to find £25,000 (on average) for the deposit.”

The picture on buy-to-let was more mixed.

Despite the strong growth in buy-to-let remortgages, which were up 32.4 per cent by number and 35.3 per cent by value than the same month the previous year, tax changes have prompted a slump in new lending.

There were 5,000 new buy-to-let house purchase mortgages completed in the month, some 5.7 per cent fewer than in the same month a year earlier.

By value this was £0.7bn of lending in the month, 12.5 per cent down year-on-year.

Mark Dyason, managing director of specialist property finance broker Thistle Finance, said: “We are seeing a particular surge in buy-to-let remortgages, especially among portfolio landlords.

“The fact that buy-to-let remortgages are up by a third compared to a year ago shows that those landlords still in the market are taking it seriously and still see a future in it.

Source: FT Adviser