Mortgage market in Wales looking strong going into 2015, says CML

Taylor Scott International News

Mortgage lending in Wales remains driven primarily by lending for house purchase, with first time buyers in particular showing strong year on year growth, according to the latest data from the Council of Mortgage Lenders. In the third quarter, there were 3,300 first time buyer loans in Wales, 18% up on the third quarter of 2013. But in the short term lending to this grow is slowing and was 3% down on the previous quarter. Also, first time buyers in the period borrowed £350 million, unchanged from the previous quarter but 21% up on the third quarter of 2013. There were 3,900 home mover loans in the third quarter, up 11% on the previous quarter and 8% more than in the third quarter of 2013. Total value of these loans was £520 million, up 16% on the second quarter and up 18% on the third quarter 2013. Remortgage lending in the quarter in Wales remained unchanged in volume levels quarter on quarter but down 23% compared to the same quarter in 2013. However, the data also shows that the past two quarters have seen the highest lending volumes by first time buyers since 2007. The CML said that first time buyer affordability has been relatively good in Wales compared to the UK, with first time buyers typically borrowing 3.23 times their gross income, which was unchanged from the second quarter but less than the UK average of 3.41. The typical loan size for first-time buyers breached the £100,000 mark for the first time in Wales since 2007, totalling £100,800, up from £99,000 in the second quarter. The typical gross income of a first time buyer household was £31,868 compared to £30,484 in the second quarter. The relatively low level of interest rates saw first-time buyers' monthly payment burden remain relatively low in the third quarter at 18.2% of gross income being spent to cover capital and interest payments, a smaller proportion of income than the 19.6% UK average and unchanged from 18.2% in the second quarter. Lending to home movers, unlike first time buyers, saw an increase quarter on quarter in Wales. Home mover affordability improved fractionally, with home movers typically borrowing 2.79 times their gross income compared to 3.41 for the UK overall and 2.82 in the second quarter. The typical loan size for home movers was £121,599 in third quarter, up from £117,995 in the previous quarter. The typical gross household income for home movers was £46,001 in third quarter compared to £42,247 in second quarter. Home movers' payment burden remained relatively low in Wales at 17.5% of gross income being spent to cover monthly capital and interest payments, less than the 18.8% UK average and 17.2% seen in the second quarter. Remortgage lending in Wales totalled 3,100 loans advanced in the third period of 2014, unchanged from the second quarter, but down 23% compared to the same quarter in 2013. These loans totalled £340 million in value, an increase of 6% quarter on quarter but down… Taylor Scott International

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