In the second quarter, there were 3,300 first time buyer loans in Wales, some 32% up on the previous quarter, and 27% up on the same quarter of 2013. First time buyers in the period borrowed £340 million, up 31% on the previous quarter, the data from the Council of Mortgage lenders shows.
The data also shows that there were 3,500 home mover loans in the second quarter, up 17% on the previous quarter and 9% more than in the same quarter of 2013 while the total value of these loans was £440 million, up 16% on the first quarter and up 13% on the second quarter 2013.
Remortgage lending in the quarter declined in Wales compared to the previous quarter and the same quarter in 2013.
House purchase lending to home buyers increased quarter on quarter in Wales totalling 6,800 loans, up 24% compared to the first quarter and the value of these loans totalled £790 million, a rise of 23% on the first quarter. Compared to the second quarter of 2013, the number of loans increased by 17% and value of these loans increased by 23%.
First time buyer affordability changed fractionally, with first time buyers typically borrowing 3.23 times their gross income, which was less than the UK average of 3.46 and slightly changed from 3.24 in the first quarter.
The typical loan size for first time buyers was £99,000 in the second quarter, up from £98,000 in the previous quarter. The typical gross income of a first time buyer household was £30,400 compared to £30,100 in the first quarter.
The relatively low level of interest rates saw first time buyers' payment burden remaining relatively low in the second quarter at 18.2% of gross income being spent to cover capital and interest payments, a smaller proportion of income than the 19.4% UK average and slightly changed from 18.3% in the first quarter.
In the second quarter of 2014, lending to home movers showed similar growth patterns in Wales to first time buyer lending although at a slower rate of growth. Home mover affordability changed fractionally, with home movers typically borrowing 2.82 times their gross income compared to 3.09 for the UK overall and 2.74 in the first quarter.
The typical loan size for home movers was £117,900 in second quarter, up from £112,500 in the previous quarter. The typical gross household income for home movers was £42,240 in second quarter compared to £42,000 in first quarter.
Home movers' payment burden remained relatively low in Wales at 17.2% of gross income being spent to cover monthly capital and interest payments, less than the 18.7% UK average and 17.3% seen in the first quarter.
Remortgage lending in Wales declined both quarter on quarter and year on year. Home owner remortgage lending in the second quarter totalled 3,100 loans advanced in the period, which was a decrease of 9% on first quarter and down 18% on the second quarter 2013. These loans totalled £310 million in value, a decrease of 11% quarter on quarter and down 14% compared to the second quarter of 2013.
‘With new FCA mortgage market rules being introduced in this quarter, there was potential for a period of adjustment as the market adapts to the new rules, however, this does not seem to be the case in Wales,’ said Peter Hughes, chair of CML Cymru.
‘First time buyers and home movers have shown substantial growth on the previous quarter and compared to this period last year. The affordability constraints are less in Wales compared to the UK overall, which suggests there are relatively favourable conditions for those looking to own a home,’ he added.
