Findings compiled from the Council of Mortgage Lenders states that the usual seasonal dip in home lending did not happen in 2016. The findings also announce that home buyers in London borrowed 7.1 billion in the first three months of 2016, representing an increase of 6% quarter on quarter and 41% on a year ago. Home buyers also applied for 21,400 loans which represents a loss of 2% from the previous quarter, and an even bigger decline when compared to the first quarter of 2015.
Home movers borrowed 4.2 billion, representing a rise of 18% quarter on quarter and 63% when compared to 2015. Additionally, first-time buyers borrowed 2.9 billion, representing a decrease of 7% when compared to the forth quarter of 2015. The figure for first-time buyers still represents an increase of 19% on the first quarter of 2015. 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 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, is heartened by seeing home movers leading the way with borrowing particularly in this climate. “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.
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