Wednesday 22 August 2018 10:14 am | Updated: Friday 24 May 2019 7:47 pm

First-time buyers drop off market as mortgage completions sink

First-time buyer mortgages fell sharply in the second quarter of 2018, signalling a drop in new homeowners coming onto London’s subdued property market.

Roughly 10,300 new first-time buyer mortgages were completed in London in the three months to the end of June, marking a 3.7 per cent fall from the same period in the previous year.

While house prices in London have edged slightly down over the last twelve months, the mortgage data is fresh evidence of a drop in new homeowner activity as properties still remain largely unaffordable to much of the capital's workforce.

The UK Finance figures come less than a month after the Office for National Statistics (ONS) revealed that on average young people in London need to pay 13 times their annual salary to get onto the property ladder.

According to today's report, remortgaging activity from April to June was also at its highest level in nine years, as homeowners sought to secure a low-interest mortgage rate prior to an expected rise from the Bank of England.

Jackie Bennett, director of mortgages at UK Finance, said: "House purchase activity has slowed slightly, with affordability remaining a challenge for many would-be borrowers. This underlines the need for clarity over the future of the Help to Buy scheme after 2021."

Jeremy Leaf, north London estate agent and a former Royal Institution of Chartered Surveyors residential chairman, said: "The signs are not great as buyers struggle to recover from an affordability crisis and overpricing. Clearly, we need to see more transactions and that will only happen if first-time buyers in particular and home movers generally feel more confident about the future, and we see more realism among sellers."