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First-time Buyers

First-time buyers drive London market

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

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“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.