London house prices: Mortgage lending rises 41 per cent in capital
Slowdown? What slowdown?
Mortgage borrowing to fund London house purchases rose a whopping 41 per cent in the first quarter of 2016 compared with last year, up to £7.1bn, figures published by the Council of Mortgage Lenders this morning revealed.
The amount borrowed was also up quarter-on-quarter, rising six per cent on the last three months of 2015.
For once, the growth was not driven by first-time buyers – the amount those getting a foot on the ladder borrowed actually fell seven per cent to £2.9bn on a quarterly basis, although it was up 19 per cent year-on-year.
This was equivalent to 10,700 loans being issued – down 10 per cent on the fourth quarter of 2015, but up three per cent year-on-year.
The amount borrowed increased to £248,047 (£130,500 was the UK average) from £243,746, but this was offset by a rise in the total household income of borrowers to £62,508 (£40,000 was the UK average) from £61,155 meaning the median income multiple remained virtually unchanged from 3.94 to 3.93.
Home-movers, meanwhile, borrowed £4.2bn – up 18 per cent on a quarterly basis and 63 per cent compared with a year ago. They almost matched first timers, with 10,600 loans being made.
The amount being lent for remortgages also rose, up 36 per cent on last year, or four per cent on the prior quarter, to £4bn. This was the highest first quarter since 2009.
The proportion of monthly gross income home buyers spent on capital and interest repayments was 19 per cent – the lowest level since the CML began tracking this metric in 2005.
Paul Smee, director general of the CML, said: “The usual seasonal dip in lending in the first quarter of the year didn't seem to impact London as strongly as the UK overall, mainly due to a strong uptick in home mover activity.
“The housing market in Greater London has some unique characteristics compared to the rest of the UK – more first-time buyers, but lower overall levels of home-ownership.
"Affordability and the supply of housing remain critical factors for the London market, and we will be pleased to work with the new mayor and his deputy on how to deliver appropriate strategy over his term of office.”