Liquid error: wrong number of arguments (2 for 1) London property market avoids usual seasonal lending dip | Marsh & Parsons Sales and Lettings Estate Agents London

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London property market avoids usual seasonal lending dip

Wed 25 May 2016

Thursday, 26 May 2016 The usual seasonal dip in home lending in the first quarter of the year didn't seem to
happen in London as the latest data shows borrowing up quarter on quarter and year on year. The data from the
Council of Mortgage Lenders shows that home buyers in London borrowed 7.1 billion in the first three months of
2016, up 6% quarter on quarter and 41% on a year ago. They took out 21,400 loans, down 2% on the previous
quarter but up 20% compared to the first quarter 2015.First time buyers borrowed 2.9 billion, down 7% on the
fourth quarter 2015 but up 19% on the first quarter last year. This equated 10,700 loans, down 10% quarter on
quarter but up 3% year on year.Home movers borrowed 4.2 billion, up 18% quarter on quarter and 63%
compared to a year ago. This equated to 10,600 loans, up 8% quarter on quarter and 43% compared to the first
quarter of 2015.Remortgage activity totalled 4 billion, up 4% on the fourth quarter 2015 and 36% compared to a
year ago. This came to 13,500 loans, up 2% quarter on quarter and 21% compared to a year ago.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. Remortgage lending also performed well resulting in the
highest first quarter remortgage levels in the capital since 2009,' said Paul Smee, director general of the
CML.The housing market in Greater London has some unique characteristics compared to the rest of the UK
such as more first time buyers, but lower overall levels of home ownership,' he pointed out.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,' he added.The data also
shows that quarter on quarter affordability metrics for first time buyers show that the amount borrowed increased
to 248,047 compared to the UK average of 130,500, from 243,746, but this was offset by a rise in the total
household income of borrowers to 62,508 compared to the UK average of 40,000, from 61,155 meaning the
median income multiple remained virtually unchanged from 3.94 to 3.93.London home movers saw a similar
trend to 338,500 to the UK average of 172,295, from 315,995 the previous quarter, and household income
increased to 91,862 on average compared to 56,104 UK-wide, from 84,313 meaning the income multiple
decreased slightly from 3.87 to 3.83.The proportion of monthly gross income home buyers are spending on
capital and interest repayments was 19.0%, which was the lowest level since the CML began tracking this metric
in 2005.The number of remortgage loans was the highest first quarter figure since 2009, and the highest value of
remortgage lending in London in the first quarter since 2008.David Brown, chief executive officer of Marsh &
Parsons, believes that it is encouraging to see home movers at the forefront of borrowing at a time when the
supply of new housing is low.It is vital that existing home owners are taking opportunities to sell up and move up
the property ladder, freeing up properties at the lower end of the market. It's also a great vote of confidence in
London,' he explained.People sell their homes when they recognise strong house price growth and the
favourable returns to be made, plus the belief that they'll be able to find a buyer easily. In London, all these
elements are firmly in place,' he pointed out.He revealed that the firm saw buyer demand increase 9% year on
year in the first three months of 2016 with an average of 14 buyers competing for every available property on the
market.It's important in the long term that first time buyers in London remain similarly assured of the affordability
and possibility of climbing onto the ladder,' he added.

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