Buy To Let
First-time buyers drive London housing market
The number of first-time buyers taking out loans in Greater London increased by 29 per cent year-on-year, according to data from the Council of Mortgage Lenders (CML).
The property market tends to face a slump in the first quarter – and this year was no exception – but year-on-year lending has increased.
Paul Smee, CML director general, said: “The usual seasonal dip in lending has affected London, mirroring the rest of the UK, but lending year-on-year shows a strong upward trend. First-time buyers continue to be a key driver as an increasing number realise their aspiration of owning a home.”
The typical first time buyer in London borrowed 3.83 times their gross income in the first quarter of this year, higher than the national average of 3.42, with a typical loan size of £200,000.
The nation-wide average loan size in the same period was £118,750.
First-time buyers in London spent 20.7 per cent of their gross income on capital and interest payments related to their loans.
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Andy Knee, chief executive of LMS, said: “First time buyer loans in London saw a significant year-on-year growth of nearly a third despite rising house prices as buyers remain keener than ever to take a step onto the property ladder. Clearly this demonstrates that while London remains a separate entity from the rest of the UK, high prices and large loans are not deterring those who want their own bricks and mortar.”
Overall Greater London lending for home-owner house purchases was down 13 per cent during the first three months of 2014 compared to the fourth quarter of 2013. But it was up 22 per cent compared to the first quarter of last year. The total value of new loans to homeowners was £5.6bn, up 37 per cent compared to the year before.
Homemovers in London took out 8,900 loans, a rise year-on-year of 13 per cent by volume. The total value of the loans granted increased by 27 per cent.
Knee added: “The capital is the catalyst driving the rest of the UK property market. Overall the housing market continues to go from strength to strength.”