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First-time buyer activity increases across Britain

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Written by: Moa Aarenstrup
25/11/2015
First-time buyer lending increased in value across Britain in the third quarter of the year, figures from the Council of Mortgage Lenders (CML) show.

Remortgage activity has also increased in both value and volume across the board, with London seeing the highest figures in value and volume since 2008 and 2009, respectively.

First-time buyers

Wales saw the highest increase in loan value both compared to the last quarter and the same time last year with an increase of 21% for both periods. This represented £410m in the third quarter of 2015.

However, while London saw the highest quarter-on-quarter increase of 24%, up to £3.4bn, it was a mild increase of 4% from the same period last year.

At £920m, Scotland saw the lowest quarter-to-quarter first-time buyer value growth of 2%, however, this increased by 16% compared to Q3 2014.

Northern Ireland’s first-time buyers borrowed £180m, a quarter-on-quarter increase of 20% and a year-on-year increase of 13%.

London saw the highest quarter-on-quarter increase in the number of loans, up 17% to 12,800, however, it was the only region to see a year-on-year decline of -1%. Some 54% of all house purchase activity in the capital was made up by first-time buyers.

Wales’ first-time buyer loan numbers rose across the board, with a 16% increase both quarter-on-quarter and year-on-year, totalling 3,700 loans for Q3.

Northern Ireland saw a modest increase in loan numbers, up to 2,000 from 1,800 in the second quarter, and 1,900 in Q3 2014.

Derek Wilson, CML chair for Northern Ireland, said: “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.”

Home movers

London saw the highest figure of homemover loans at 10,800, an increase of 32% on Q2 and 4% on Q3 2014. This was closely followed by Scotland at 10,000 loans, a 12% quarter-on-quarter increase and a 16% rise on Q3 2014.

Northern Ireland saw its highest figures in both volume and value since 2007, with the number of homemover loans reaching 1,600, up by 6.7% compared to last year’s figure of 1,500.

Homemover loans totalled £4bn in London, an increase of 38% on the second quarter, and 11% on 2014’s figure.

While all regions saw increases, Scotland saw the highest year-on-year rise of 17%, with a total value of home-mover lending standing at £1.5bn.

Linda Docherty, CML chair for Scotland, said this is the highest level of borrowers purchasing their home in the country since 2007.

“Activity has remained robust over the past six months, with a surge in both first-time buyers and homemovers, and with an economic climate of low interest rates, increased earnings and competitive mortgage offers we would expect this to continue as we head towards the New Year,” she said.

The lowest homemover value figure came from Northern Ireland, with a total of £190m, a £20m and 12% increase year-on-year.

Remortgaging

Northern Ireland saw the highest year-on-year increase in value for remortgages at 80%, hitting £180m. This was most closely followed by Wales, with a 27% increase.

“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 for the past few years,” said Wilson.

The lowest remortgage value figure across the regions is seen in London, with a 25% year-on-year increase to £3.6bn, however, this is the highest amount borrowed for remortgage overall in the region since the last quarter of 2008.

The capital saw its highest number of remortgage loans since the first quarter of 2009 totalling 12,800 loans, an increase of 8% compared to quarter two, and 15% compared to last year.
Wales was the only other region to show quarter-on-quarter growth, with a 5.6% increase, totalling 3,800 loans in Q3. This is a 22% increase compared to last year.

Julie-Ann Haines, CML chair for Wales, said: “House purchase and remortgage activity in Wales continued to show positive growth for the second quarter of the year. Affordability is better in Wales than for the UK overall.

“We would expect this upward trend to continue to close out the year given the competitive mortgage deals available as a result of interest rates remaining low coupled with government schemes like Help to Buy Cymru assisting demand.”

Scotland totalled 6,800 remortgage loans, the same as quarter two, an increase of 15.3% since last year.

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