London home buyers down three per cent in fourth quarter of 2016, CML says
The number of home buyers in London dropped to a four-year low last year, according to new data from the Council of Mortgage Lenders (CML).
Home buyers in London borrowed £24.5bn for house purchase, down 0.4 per cent on 2015, and took out 75,800 loans, down seven per cent compared to the year before.
The CML blamed supply and affordability issues for the decline. Earlier this month the National Housing Federation said first-time buyers would need to save £2,300 a month in order to buy a home by 2021.
The amount borrowed by first-time buyers in the capital went up three per cent to £11.9bn, but home movers borrowed three per cent less than in 2015, at £12.5bn.
“The number of home buyers in London fell to a four year low in 2016. Home mover activity in particular continues a downward trend, with the fewest loans since 1991," said CML director general Paul Smee.
"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.
“By contrast, remortgage activity appears to be experiencing a resurgence. Competitive mortgage rates aided by low interest rates have sparked remortgage levels not seen in the capital since 2008.”
Read more: London's first-time buyer hotspots
The CML data showed that the average loan size for first-time buyers in the capital was £254,000 in the fourth quarter of 2106. The average age of borrowers was 31, and the percentage of monthly income going towards servicing capital and interest repayments was 18.1 per cent – down from 19.4 per cent in the final quarter of 2015.
