New Council of Mortgage Lenders (CML) data on the characteristics of
lending in Wales in the second quarter of 2015 outlining mortgage
lending to first-time buyers, home movers and remortagors.
Lending in the second quarter 2015:
• House purchase activity saw large quarter-on-quarter increases compared to the first quarter of the year, but a slight decline in volume of loans compared to the second quarter in 2014.
• First-time buyers increased significantly from the first quarter, but decreased in amount borrowed and number of loans compared to the second quarter of 2014.
• Home movers went up in volume and value quarter-on-quarter, and while number of loans remained unchanged year-on-year the amount borrowed by home movers increased.
• Remortgage activity increased compared to the first quarter and on the same quarter last year.
Julie-Ann Haines, CML chair for Wales, commented:
“House purchase activity appears to have woken up in Wales after traditionally slower levels in the winter months. The uptick in remortgage is, in particular, striking as levels had remained relatively identical over the previous four quarters. With the current low rates of interest unlikely to continue, it seems that borrowers are now taking advantage of competitive mortgage rates before a rise.”
Lending for house purchase and remortgage
House purchase lending in Wales saw a quarter-on-quarter rise, in both number of loans and amount borrowed, by nearly a third compared to the first quarter of 2015. There was a slight dip in number of loans advanced when compared to the second quarter of 2014. First-time buyers accounted for 47% of all house purchase activity with home movers making up the remaining 53%.
Remortgage lending went up a year-on-year in amount borrowed and increases in number of loans mean quarterly remortgage activity is the highest its been since the fourth quarter of 2013 in Wales.
Lending to first-time buyers
First-time buyers in Wales typically borrowed 3.18 times their gross income, up from 3.13 the previous quarter but less than the UK average of 3.38.
The typical loan size for first-time buyers was £102,207 in the second quarter, up from £101,150 in the first quarter. The typical gross income of a first-time buyer household was £32,526 also up compared to £32,320 in the first quarter.
First-time buyers' payment burden in the second quarter was 17.7% of gross income being spent to cover capital and interest payments, down on the first quarter's 18.0%, and lower than the 18.4% UK average.
Lending to home movers
Home movers in Wales typically borrowed 2.77 times their gross income, up from 2.75 the previous quarter but less than the same quarter last year and the UK average of 3.08.
The typical loan size for home movers was £126,000 in the second quarter, unchanged from the previous quarter, but substantially lower than the £160,994 UK average. The typical gross income of a home movers' household was £46,314, up compared to £44,853 in the first quarter.
Home movers' payment burden in the second quarter saw them spend 17.0% of their gross household income being spent to cover capital and interest payments, a slight change from 17.1% in the first quarter, but lower than the 18% UK average.
(Source - CML Press Release)