The 2,500 house purchase loans, worth £240 million, increased 4% by number and value from the third quarter of the year. The number of loans represented an increase of 4% (with no change in the value) from the last quarter of 2010.
UK wide, lending for house purchase in the final quarter of the year fell 5% by volume and 7% by value from the previous quarter but grew 1% by volume and 3% by value compared to the last quarter of 2010.
1,800 loans for remortgage were taken out in Northern Ireland in the fourth quarter, down 10% from the previous quarter but up 20% from the final quarter of 2010. By value, those remortgaging borrowed £170 million in the last quarter of the year, down 6% from the third quarter but up 13% from the year before.
UK-wide, remortgage lending fell 9% by number and 8% by value from the previous quarter, but increased 8% by volume and 11% by value from the last quarter of 2010.
Over 2011 as a whole, Northern Ireland accounted for just under 2% of the total UK house purchase and remortgage market.
Overall in 2011, the number of loans for house purchase in Northern Ireland, at 8,800 loans, was down by 11%. However, the 7,200 remortgage loans taken out represented a 1% increase from 2010.
The number of first-time buyers in Northern Ireland stayed at 1,400 from the third quarter to the final quarter and increased from 1,100 in the last quarter of 2010. By value, first-time buyers borrowed £120 million in the fourth quarter, up from £110 million in the previous quarter and the final quarter of the previous year.
For 2011 as a whole, 4,900 loans were advanced to first-time buyers, worth £400 million, up in number from 4,700 the previous year but the value of loans was down from £430 million.
Chair of CML Northern Ireland Derek Wilson said:
“The increase in house purchase loans is a much needed confidence boost to the market in Northern Ireland. Lack of job security and underlying economic uncertainty have led to a lack of demand for mortgages, particularly among movers.
“We need to try to combat the general feeling of negativity and to promote the value of the wider property market to the economy encouraging confidence to breed confidence.”
Karl Allen, director of the Northern Ireland-based financial advisors Money Matters, commented:
"Tentative it may be, but any growth in mortgage lending after so many lean months has to be welcome. Northern Ireland's property market fell faster and harder than anywhere else in the UK, and for more than three years it has been stuck in the mud - hampered by, among other issues, weak consumer confidence and a struggling economy.
"But as tough as things got, people have never fallen out of love with the dream of owning their own home. This CML data hints that that frozen demand may finally be thawing out and our own data suggests this is true in particular of first time buyers.
"This is not down to any sudden relaxing in lending criteria. The banks are being as cautious as ever about who they lend to. Rather it is a gradual process of people who are currently renting or who have delayed their buying decision, reaching a tipping point.
"Many would-be first time buyers are realising that it is now often cheaper to buy than rent. In some parts of Northern Ireland, house prices are 40% down on their peak levels and many believe that the market now offers exceptional value.
"With interest rates so low and minimum deposits now at 5 to 10%, there are some highly competitive mortgages out there."
