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London lending up

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26/11/2015
Mortgage lending in the capital rose during the last three months, with first-time buyer loans increasing by 17%
London lending up

London saw a rise in lending across all sectors, including first-time buyers, home movers and remortgagors, according to the latest figures for the third quarter of 2015 from the Council of Mortgage Lenders.

It noted a particular boost in lending to first-time buyers, up 17% on the previous quarter at 12,800 mortgage loans, although this was marginally down (1%) on 2014.

First-time buyers borrowed £3.4bn in total, with a typical loan size of £238,293, representing 3.85 times their gross income.

First-time buyers’ payment burden in the second quarter was 19.2% of gross income to cover capital and interest payments, down on the second quarter’s 19.5% but higher than the 18.4% UK average.

Home movers

There were 10,800 home-mover loans in London, up 32% on the previous quarter and 5% on the third quarter of 2014.

Home movers in London typically borrowed 3.79 times their gross household income, with an average loan size of £318,503. The typical gross income of a home movers’ household was £86,727.

Remortgagors

Remortgage lending increased 8% by volume and 10% by value compared to quarter two. Compared to the third quarter last year, it was up 15% by volume and 25% by value.

Remortgage lending also saw a rise year-on-year and quarter-on-quarter in amount borrowed and in number of loans. This quarter had the highest number of remortgage loans since the first quarter of 2009, and the most amount borrowed for remortgage overall since the last quarter of 2008.

Paul Smee, director general of the CML, commented: “In London, as in the UK, the market has continued growth the past two quarters in both house purchase and remortgage activity.

“The number of people buying their home in London is at levels not seen since 2007, but this is still only 60% of the numbers seen at the height of the market. Borrowers appear to be taking advantage of relatively favourable economic conditions and this could mean a continual upward trajectory moving into the New Year.”

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