Borrowing for home loans 'at its highest in decade' says report

Home buyers in Northern Ireland borrowed £480 million during the last quarter according to new data
Gary McDonald Business Editor

MORE than 60 loans a day were approved for house purchase in Northern Ireland during July, August and September, its highest level in a decade, new figures show.

Home buyers borrowed £480 million during the quarter according to UK Finance, a new trade association representing the finance and banking industry.

And more than half of that (£260 million) was for first-time buyers, who were buoyed this week when the Chancellor revealed in his Budget that stamp duty is to be abolished immediately for first-time buyers purchasing properties worth up to £300,000.

The UK Finance data show there were 4,300 loans totalling £480mn taken out for house purchase in the third quarter, up 10 per cent quarter-on-quarter and 19 per cent compared to a year ago.

First-time buyers borrowed £260m (2,600 loans), up eight per cent on the second quarter and 24 per cent on the third quarter last year. This totalled 2,600 loans, up eight per cent quarter-on-quarter and 24 per cent year-on-year.

Home-movers borrowed £220m (1,700 loans), up 16 per cent both quarter-on-quarter and year-on-year, while remortgaging activity was unchanged at £220m.

Derek Wilson, chair of UK Finance's Northern Ireland mortgage committee said: “Lending for house purchase picked up again in the third quarter and is now at its highest level for a decade.

"First-time buyers continue to borrow more than movers, with lower house prices helping to boost activity in what remains the most affordable region in the UK.

"More than half of first-time buyers managed to take out a mortgage for less than the stamp duty threshold of £125,000, either through purchasing outright or through co-ownership.”

First-time buyer affordability in Northern Ireland was unchanged in the third quarter. First-time buyers typically borrowed £99,000 (£139,500 in the UK overall), up from £96,950 in the previous quarter.

The average household income was £32,622 (compared to £41,009 in the UK overall), up slightly from £32,245.

Home movers borrowed an average in the third quarter of £116,413 (£180,995 in UK overall), down from £119,000 in the second quarter.

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