THE Northern Ireland mortgage market could "hit a speed bump sooner rather than later", a leading economist has warned.
New figures from UK Finance, released yesterday, show the number of first-time buyer mortgages completed in the second quarter of this year was up by 4.1 per cent compared to the same period last year.
Home-mover mortgages also rose by 4.7 per cent.
And home-owner remortgages were up by 16.5 per cent.
Richard Ramsey, Ulster Bank chief economist, said although the north's housing market had outperformed the UK average for the last year or so, a closer look at mortgage figures told a more complex story.
"All three categories of mortgage activity (first-time buyer, home mover and remortgage) posted faster rates of annual growth in Northern Ireland relative to the UK," he said.
"However, these three segments of the mortgage market are moving at three different speeds."
He said the remortgage market, typically used for home improvements or extensions, was the fastest-growing sector.
"Despite this growth, the level of remortgage activity remains just over one-third of what it was in 2007," he said.
Mr Ramsey said the first-time buyer (FTB) market has seen steady growth.
"Since 2013, the first-time buyer market has become the most significant part of the local mortgage market," he said.
"Indeed, last year FTB mortgage activity hit a 14-year high. 2019 looks set to be a 15-year high with the number of FTB loans up 7.6 per cent year-on-year at the halfway point.
"This compares favourably with less than 3 per cent for the UK."
He said the home-mover market had experienced sluggish growth.
"The home-mover market has traditionally been more significant than the FTB market," he said.
"However, the house price crash and the widespread incidence of negative equity acted as a barrier to first-time buyers moving up the property ladder.
"Home mover activity slumped by 80 per cent from 2006 to 2012.
"While the level of home mover activity has doubled from its post-downturn trough, the level of activity remains subdued. During the first six-months of 2019, the home mover market has posted growth of 2.8 per cent year-on-year.
"Nevertheless, this still compares favourably with the UK where growth was marginal at 0.5% year-on-year."
Mr Ramsey said although the mortgage market "remains in expansion mode... different segments are growing at different speeds".
"Given the challenging economic outlook, the mortgage market will not be insulated from wider economic developments and could hit a speed bump sooner rather than later," he said.
