Posted on Wednesday 25 February 2015 by Ulster Business

Mortgage lending jumps 40 percent on thirsty first time buyers

The renewed thirst to own a home saw mortgage lending in Northern Ireland jump by 40% last year with first-time buyers leading the way, according the Council of Mortgage Lenders.

Its full year report for 2014 revealed that £1.3bn was lent for home-owner house purchase throughout the year in 13,000 separate loans.

Encouragingly for the housing market, £620m of that was to first-time home buyers - a 35% jump on 2013 – from a section of the home buying market which is said to be vital to a longer-term recovery. That’s the highest level of borrowing from first-time buyers since 2006.

And affordability for first time buyers has also remained relatively steady with borrowers typically borrowing 2.74 times their gross income, well below the UK average of 3.38 times, on homes worth £80,955 on average. The typical gross income of a first-time buyer households here was £29,590.

As a comparison, first time buyers in London typically borrow 3.84 times their household salaries averaging £56,314.

Affordability for home movers in Northern Ireland also stayed steady at 2.43 times gross income on houses worth £105,775 on average. The typical gross household income of a home mover stood at £44,887.

Home mover affordability changed fractionally, with home movers typically borrowing 2.43 times their gross income compared 2.46 in the third quarter and to 3.03 for the UK overall.

"It is very encouraging to see the growth in the Northern Irish market in 2014, especially with the number of people buying their first homes being at its highest level since 2006,” Council of Mortgage Lenders chair Derek Wilson said. “Lending has come a long way this year, and unlike the UK overall, Northern Ireland saw quarter-on-quarter growth in all lending types which is positive news for the future of the market."

The Council of Mortgage Lenders is  the trade association for the mortgage lending industry, and its members account for around 95% of UK residential mortgage lending.

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