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Property Ladder – Recovery Boost

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FIRST time buyers have boosted the recovery of the Northern Ireland property market, the Council of Mortgage Lenders Chairman Derek Wilson has revealed.

Speaking at the CML’s recent annual conference on the mortgage market Mr Wilson said that while the past few quarters have seen rises in all types of lending, what really started to push the recovery in 2013 was an increasing number of first time buyers entering the market.

Before the recession in 2007 they accounted for 32% of house buyers but, by 2015 this had risen to 57%.

Quoting statistics on the local market he revealed that home owner house purchase lending in 2014 and 2015 totalled £1.3billion in Northern Ireland and while not near the peak lending level of £2.9billion in 2006, was significantly up from the £810 million advanced in 2012 and also the highest since 2007.

Borrowing by first-time buyers in the past two years has totalled £660 million annually, at a similar level to 2007.

Borrowing by home movers declined sharply during the recession but now totals £680 million, similar to 2008 but significantly below the peak level of £2.1 billion in 2006.

Remortgaging has also increased in 2015, up 45% and now at its highest level since 2010.

Mr Wilson said that while the dizzying heights of 2006 and 2007 were followed by a number of difficult years, 10 years on from the housing peak, times are changing and it may finally be possible to view the market with more optimism.

But he added: “The effects of the recession, particularly the issue of negative equity, means that Northern Ireland still lags behind the rest of the UK in its recovery.

“The recovery process has been slow, but it has been progress none the less, and the CML predicts activity in the UK mortgage market to continue its modest upward trajectory through 2016 and 2017.

“The annual number of residential transactions in Northern Ireland totalled just over 29,000 in 2007, but this dropped to roughly 11,000 annually between 2008 and 2011.

The market has recovered from this stag nation and seen a substantial increase in sales since then.

“The first quarter of 2016 saw 5,300 sales and, given that a lull in activity in the winter months means that the first quarter is usually the slowest of the year, we expect transactions to increase further again in 2016.”