Wales less affected by end of stamp duty holiday than UK overall
31-05-2012
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Some 58% of first time buyers in Wales bought property for less than £125,000 in the first quarter of 2012, down only slightly from 59% in the previous quarter, showing little evidence of first time buyers choosing more expensive properties than usual to take advantage of the ending stamp duty holiday on property between £125,000 and £250,000.
On average, Welsh first time buyers continued to borrow more of their property's value than in the UK overall. The average first time buyer borrowed 85% in the first quarter, up from 83% in the final quarter of 2011 and five percentage points more than the overall UK figure of 80%.
As in the UK as a whole, in Wales the proportion of income consumed by first time buyers' mortgage interest payments increased in the first quarter, from an average of 12% in the final quarter of 2011 to 12.3% in the three months to March 2012. This was still lower than the 12.7% paid by first time buyers across the UK overall.
Some 1,900 loans worth £180 million were taken out by first time buyers in the first quarter, down by 14% (10% by value) compared to the last quarter of 2011 but up by 12% (20% by value) compared to the first three months of 2011.
Similarly, the number of loans advanced to home movers increased compared to the same time last year, but fell compared to the last quarter of 2011. Some 3,000 loans worth £340 million were taken out by home-movers in Wales, down from 3,800 worth £440 million in the fourth quarter of 2011 but up from 2,700 worth £300 million in the first three months of last year.
Overall, Wales experienced a fall in lending for house purchase in the first quarter, as did the UK as a whole. 4,900 loans were taken out, down by 17% compared to the final quarter of 2011, but an 11% increase compared to the first quarter of last year.
Remortgage lending also dropped in Wales and UK wide. Some £370 million was advanced for remortgage in Wales in the first quarter, down from £410 million in the last three months of 2011 and £420 million in the three months to March last year.
In the first quarter of 2012, Wales accounted for 4% of the total UK house purchase market by number and 5% of all UK remortgaging.
‘Lower house prices in Wales mean that the effect of the recently expired stamp duty holiday for first time buyers has been less pronounced than in the UK as a whole,’ said Peter Hughes, chair of CML Cymru.
‘Nevertheless, activity in Wales in the first quarter followed a similar pattern to that of the UK, except for average deposits where first time buyers, and home movers to a lesser extent, are still seeing a more positive trend in Wales by putting down less as a deposit than their UK wide counterparts,’ he pointed out.
He also said that the recent publication of the Welsh government's Housing White Paper represents a much needed opportunity for increasing affordable housing supply and quality in Wales. ‘CML Cymru looks forward to further constructive dialogue with the Welsh government on how both commercial lenders to housing associations and retail mortgage lenders to individuals, including first time buyers and buy to let landlords, can help to deliver new housing supply and access to home ownership and quality rented accommodation in Wales,’ added Hughes.
