Mortgage Finance Gazette: Quarterly Growth in London's Purchase & Remortgage Market
Thu 27 Nov 2014
Both house purchase and remortgage lending in London grew in the third quarter compared to Q2, new data from
the Council of Mortgage Lenders shows.
The number of first-time buyer loans in London totalled 13,300 in the third quarter - up 8 per cent on the previousquarter, and 6 per cent up on Q3 2013. First-time buyers in the period borrowed 3.3 billion - up 11 per cent onthe previous quarter and 16 per cent on Q3 2013.
There were 10,600 home-mover loans in the third quarter, up 16 per cent on the previous quarter but 1 per centdown on Q3 2013. Total value of these loans was 3.7 billion, up 18 per cent on the second quarter and 10 percent on the third quarter 2013. Remortgage lending in the quarter showed growth in London compared to theprevious quarter but down in volume slightly compared to the third quarter last year.
Richard Sexton, director of e.surv chartered surveyors, comments on the figures: A first-home in London comeswith a hefty price tag, but that doesnt seem to be putting off buyers in the capital the number of first-timebuyers increased steadily between the second and third quarters of this year. Global economic uncertainty maybe sapping energy from the top of the market, but first-time buyer properties are still in high demand and shortsupply. Two-thirds of buyers spent more than a quarter of a million pounds on their first home in London.
The UK mortgage market has been fine-tuned over the last year with the new regulation arguably unsettlingdemand and some first-time buyers may have been put off as a result. To carry the existing momentum forward, we need much more new housing, and quickly, or we may facecreating a capital where only cash-rich buyers can get onto the housing ladder. While wages remain sluggish andinterest rates low, saving for a deposit will remain the biggest obstacle blocking the path to homeownership.
Peter Rollings, CEO of Marsh & Parsons, comments: Despite much talk of a cooling market, the embers are still burning brightly in terms of mortgage activity in thecapital. It is particularly encouraging that first-time buyers the lifeblood of the property market are still able tofind suitable property in London, with both monthly and annual increases reflecting this. The fact first-time buyerloans are now back to pre-recession levels show that potential homeowners are now regaining the confidence andappetite that was damaged by previous economic uncertainty.
Vital as those taking their first step on the property ladder are, it is important that those further up the chain aremoving too to prevent any bottlenecks and to this end it is heartening that home mover activity also increased inthe third quarter. While overall London lending is now back to 2007 heights, it is worth noting that figures haveremained pretty steadfast throughout 2014 which suggests that the market in the capital is becoming less volatileand more consistent."