Latest Council of Mortgage Lenders (CML) data on the profile of mortgage lending in Wales in the first quarter of 2014 show the expected seasonal dip has affected lending compared to the previous quarter, but year-on-year comparisons show growth in all borrower types.
Lending for home-owner house purchase in the first quarter of 2014 totalled 5,600 new loans. This was down 21% compared to the previous quarter but a 22% increase compared to the first quarter of 2013. The value of these loans was £640m, down 23% on the fourth quarter of 2013 but up 31% compared to quarter one 2013.
First-time buyers in Wales took out 2,600 loans, a decrease of 19% compared to the fourth quarter of 2013 but up 30% compared to the first quarter of 2013. These loans totalled £260m in value, 19% lower than the previous quarter but up 37% compared to the first quarter of 2013.
The typical first-time buyer in Wales borrowed 3.22 times their gross income in the first quarter of 2014, which was lower than the UK average of 3.42. This was up marginally from 3.20 last quarter. The typical loan size for first-time buyers in Wales was £98,000, which was less than the UK average of £118,750 in the same period. First time buyers’ typical household income fell slightly to £30,253, just down from the £30,374 average in Wales in the fourth quarter of 2013.
First-time buyers spent 18.3% of their gross income on capital and interest payments, lower than the UK average of 19.3%, but up marginally from the previous quarter in Wales and slightly higher than the 18.2% in the first quarter of 2013.
Overall for the first quarter of 2014, home movers in Wales took out 3,000 loans, with a value of £380m. This was 25% fewer, and 24% less by value, than in the fourth quarter of 2013. However, compared with the first quarter of 2013, this was a rise of 15% by volume and 23% by value.
Home-owner remortgage activity in Wales in the first quarter of 2014 decreased to 3,400 loans, down 8% compared to the previous quarter but an increase of 10% compared to quarter one of 2013. These loans totalled £350m in value, which was down 8% from the previous quarter but up 13% compared to the same quarter in 2013.
Peter Hughes, CML Cymru chair, said: “There is a usual seasonal dip in lending in the first quarter but year-on-year we see growth in all borrower types. The change since a rather flat market in Wales a year ago is significant and the numbers at the beginning of 2014 would suggest the upward trend in 2013 will continue this year.
“It is still early to judge the effect of the Help to Buy – Wales scheme but there is certainly potential to open the market to first-time buyers without large deposits, which might help ensure the momentum we have seen is sustained. First-time buyers in Wales are finding affordability to be more favourable than in the UK as a whole, with the injection of government schemes, we hope it helps more borrowers who want to own a home in Wales.”
