London homebuyer numbers fall further
Homebuyers borrowed £5.9bn for house purchase in the last quarter of 2016, down 5% on quarter three and 13% year-on-year, according to the Council of Mortgage Lenders.
Over the whole of last year London buyers borrowed 0.4% less in value compared with 2015, and 7% less in terms of the number of loans.
Both first-time buyer and homemover borrowing was down, the latter more significantly. Homemovers borrowed £2.8bn, down 8% on quarter three and 21% compared with a year ago. This equated to 7,400 loans, down 6% on quarter three and down 24% compared to the same quarter in 2015.
Over the year as a whole, lending to movers was down 3% by value and 10% by volume on 2015.
First-time buyers borrowed £3bn in the fourth quarter of 2016, down 3% on the third quarter and 4% on the fourth quarter of 2015. This equated to 11,000 loans, down 2% on the previous quarter and 7% year-on-year.
When comparing 2016 as a whole to 2015, first-time buyers borrowed £11.9bn, up 3%. This totalled 43,300 loans, down 5% on the previous year.
Paul Smee, CML director general, said: “The number of homebuyers in London fell to a four-year low in 2016.
“Homemover activity in particular continues a downward trend, with the fewest loans since 1991. Persisting supply and affordability issues appear to be exerting an ongoing restraint on growth, meaning there is some uncertainty around how the market will perform going into 2017.”
Affordability in London
First-time buyers typically borrowed £254,000 (compared to £135,000 in the UK overall), down from £260,000. The average household income was £63,700 (£40,200 in the UK overall), down from £64,700.
Homemovers borrowed £335,400 (compared to £172,500 in the UK overall), down from £336,800 the previous quarter. The average household income of a homemover was £87,300 (£54,900 in the UK overall), down from £87,600.