Yahoo Finance First time buyers snap up properties in affordable Scotland, Wales and Northern Ireland
New homeowners are driving the buoyant housing markets in Scotland, Wale and Northern Ireland, taking advantage of low interest rates to get onto the ladder.
Growth rates in those areas are twice as high as those in London in the second quarter of 2017 as young would-be owners struggle to pay the larger sums needed to purchase property in the capital.
First-time buyer numbers grew by 29pc in Scotland in the quarter, 26pc in Wales and 15pc in Northern Ireland, compared with only 8pc in London, according to figures from UK Finance, the new industry group that replaced organisations including the Council of Mortgage Lenders.
"Home buying in the capital bounced back from the traditionally subdued beginning of the year, with both first-time buyer and home mover lending showing growth both on the first quarter of 2017 and on the same period a year ago,” said Paul Smee, UK Finance’s head of mortgages.
“The housing market in Greater London has some unique characteristics compared to the rest of the UK – more first-time buyers, but lower overall levels of home-ownership. Affordability and the supply of housing remain critical factors to manage for the London market if positive activity is to continue going forward."
By contrast other parts of the country are experiencing something of a sweet spot for the market, where prices are affordable, loans available and buyers confident.
“House purchase lending in Northern Ireland reached its highest second quarter level since 2007,” said Derek Wilson, chairman of the UK Finance Northern Ireland Mortgage Committee.
“First-time buyers continue to drive that growth, out-borrowing home movers since 2010. Affordability conditions are better than in the UK overall, and are assisted by attractive rates being offered by lenders and a wide range of product choice available in the market.”
Growth in the property market overall picked up in the quarter, aided by demand from first-time buyers.
The number of loans in Northern Ireland grew by 15pc on the year and on the quarter to 3,800 - most of which were first-timers. In total they borrowed £420m in the quarter.
Wales’ growth rate hit 23pc on the quarter and 14pc on the year with 8,100 mortgages given out, just over half of which went to purchasers making their debut in the market. By cash value, those loans came to £1.1bn
Scotland’s buyers borrowed £2.5bn, with the number of loans up by 30pc on the quarter and 15pc on the year to 18,800, again with first-time buyers accounting for just over 50pc.
That is the highest number of purchases since 2007 and means Scots took out more mortgages than Londoners in the quarter, despite the capital having a larger population.
Buyers in London took 18,000 loans, up 6pc on the quarter and up 8pc on the year. But the higher prices in the capital are also very obvious in the data - by value those loans came to £6.1bn, more than twice the amount borrowed in Scotland in the same period.
This indicates that the average new mortgage borrower in London took on a debt of around £338,900, while those in Scotland borrowed £133,000. In Wales the figure was £135,800 while in Northern Ireland the average loan was around £110,500.
Richard Sexton at surveying group e.surv said that buyers with small deposits were particularly active in Northern Ireland, while Londoners needed more cash to buy their homes - he found 41pc of buyers in the capital had large deposits.
“Although buyers don’t make the decision on where to live based on the chances of their mortgage being approved, these significant regional differences have an effect on first time buyers,” he said.
“To ensure a more fluid housing market across the country, the Government must fulfill its promises and addresses the lack of accessible housing throughout the country.”
