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First-time Buyers

First-time buyers drive London market

Christina Hoghton
Written By:
Christina Hoghton
Posted:
Updated:
25/08/2016

Home mover activity plummets, as the property market in the capital is being fuelled by first-time buyers

First-time buyers boosted mortgage lending in London in the second quarter of the year, borrowing £3m from April to June, according to the Council of Mortgage Lenders.

This was up by 3% compared to the first quarter of the year, and was 10% higher than the same time last year.

But home mover activity plummeted in the capital, falling by a whopping 41% in the second quarter to £2.5bn.

Remortgage activity also drove overall lending, reaching £4.3bn, 6% higher than in Q1 and 19% on a year earlier.

However, Jeremy Leaf, north London estate agent and a former RICS residential chairman, pointed out that the figures were an indication of activity prior to the EU referendum in June, when the UK voted to leave the member state.

“Since the referendum we have noticed more of a ‘back to work’ mentality among home movers with more new buyers registering and more property listings. There is a new mood of realism with people getting on with it,” he said.

“First-time buyers taking advantage not only of rock-bottom mortgage rates but less competition from investors who are reluctant to join the buy-to-let market or expand their portfolios bearing in mind the changes to stamp duty and other regulations.”

Like London, first-time buyers played a major role in boosting activity in both Scotland and Northern Ireland, as fledgling buyers in Scotland borrowed £920m in Q2, 42% more than the previous quarter, while £200m was lent to first-time buyers in Northern Ireland, 25% more than in Q1. Lending in Wales painted a similar picture, as loans to borrowers purchasing their first home increased by 31% to reach £420m.