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Lending to home buyers in Wales continues to increase with £1bn borrowed for house purchases in the third quarter of 2016 reveals Council of Mortgage Lenders

Lending to home buyers has continued to increase in Wales with £1bn borrowed for house purchases in the third quarter of 2016, according to the Council of Mortgage Lenders (CML).

Lending was up 13% quarter-on-quarter and 9% year-on-year, with home buyers taking out 7,800 loans, up 10% on the previous quarter and 4% on quarter three in 2015.

First-time buyers borrowed £450 million, up 7% on the second quarter and 13% on the same period last year. They took out 3,900 loans, up 5% both quarter-on-quarter and year-on-year and more than any other Q3 since 2007.

 

The amount borrowed by first-time buyers on average this quarter was £108,300, up from £108,000 the previous quarter (£134,900 was the UK average). The typical average household income of a first-time buyers went from £33,800 to £34,100 (£40,500 in the UK overall), meaning the income multiple in Wales decreased to 3.29 from 3.31 the previous quarter (3.54 in the UK).

Home movers borrowed £570 million, up 16% on the second quarter and 6% compared to the same period in 2015. This came to 3,900 loans, up 15% quarter-on-quarter and 3% year-on-year.

 

Third quarter activity in Wales for home movers remained consistent with levels in the same period seen the past few years. The amount the typical home mover borrowed went from £130,700 in the previous quarter to £131,000 this quarter (£172,800 in the UK overall), and the average household income of a home mover remained the same at £46,000 (£55,200 in the UK). This meant the typical income multiple in Wales went from 2.97 in the second quarter to 2.93 this period (the UK average was 3.27).

 

Remortgage activity grew to £480 million, up 7% on the previous quarter and 17% compared to a year ago, with more borrowed this quarter than any other since the first quarter of 2009.

 

This came to 4,200 loans, up 5% quarter-on-quarter and 14% year-on-year, more than any other quarter since the fourth quarter of 2011.

 

“Lending to home buyers continues to increase in Wales, with first-time buyers really driving that growth. We saw more loans to first-time buyers this quarter than any other in 9 years, and affordability remains better in Wales than in the UK overall, ” said Julie Ann Haines, CML Cymru chair.

 

“The data reflects the first quarter post the EU referendum result and the market appears resilient so far. It is likely to take time for the extent of any potential effects to be fully understood, but clearly the mortgage market is currently firmly open for business in Wales.” 

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