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First-time buyer lending in London up on same period last year by 29%

Published: 28 May 2014

New CML data released today on the profile of mortgage lending in Greater London in the first quarter of 2014 shows the expected seasonal dip has affected lending compared to the previous quarter, but compared to the same time last year there has been significant growth in all borrower types. 

Lending for home-owner house purchase

Overall, Greater London lending for home-owner house purchase in the first quarter of 2014 totalled 20,800 new loans. This was down 13% compared to the previous quarter but a 22% increase compared to the first quarter of 2013. The value of new loans to home-owners for house purchase was £5.6bn, down 10% on the fourth quarter of 2013 but up 37% compared to quarter one 2013.  

Chart 1: House purchase lending in London: Year-on-year % change in London compared and the UK

 28.05.14 London house purchase v1

Source: CML

Lending to first-time buyers

First-time buyers in Greater London took out 11,900 loans, a decrease of 11% compared to the fourth quarter of 2013 but up 29% compared to the same period in 2013. These loans totalled £2.7bn in value, 9% lower than the previous quarter but up 49% compared to the first quarter of 2013.

The typical first-time buyer in Greater London borrowed 3.83 times their gross income in the first quarter of 2014, which was higher than the UK average of 3.42. This was an increase from the last quarter of 2013 when it was 3.79 and up from 3.60 in the first quarter of 2013. The typical loan size for first-time buyers in Greater London was £200,000, which was more than the UK average of £118,750 in the same period. First time buyers' typical household income went up slightly to £52,600 from the £52,568 average in Greater London in the fourth quarter of 2013.

First-time buyers spent 20.7% of their gross income on capital and interest payments, higher than the UK average of 19.3%  and slightly higher than the previous quarter in Greater London when it was 20.6, but lower than the 21.0% in the first quarter of 2013. 

Chart 2: Lending to FTBs in London, number of loans advanced, and lending to FTBs in London as a proportion of the UK total (1 year moving average)

 28.05.14 London FTBs v1

 Source: CML

Lending to home movers

Overall for the first quarter of 2014, home movers in Greater London took out 8,900 loans, with a value of £2.8bn. This was 14% fewer, and 11% less by value, than in the fourth quarter of 2013. However, compared with the first quarter of 2013, this was a rise of 13% by volume and 27% by value.    

Lending to home owners for remortgage

Home-owner remortgage activity in Greater London in the first quarter of 2014 totalled 10,500 loans, down 6% compared to the previous quarter but an increase of 24% compared to quarter one of 2013. These loans totalled £2.7bn in value, which was down 5% from the previous quarter but up 44% compared to the same quarter in 2013.

Chart 3: Remortgaging lending in Greater London: Year-on-year % change in Greater London compared with the UK

 28.05.14 London remortgage v1

Source: CML

Paul Smee, CML director general, commented:

“The usual seasonal dip in lending has affected London mirroring the rest of the UK but lending year-on-year shows a strong upward trend. First-time buyers continue to be a key driver as an increasing number realise their aspiration of owning a home." 

"We are increasingly looking at not one overall UK housing market, but many smaller regional markets with different characteristics, and Greater London has particular challenges. Affordability remains a crucial factor and policymakers need to be aware that any measures they implement may have different effects in different locations.” 

Notes to editors

1. The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 95% of all residential mortgage lending in the UK. There are 11.2 million mortgages in the UK, with loans worth over £1.2 trillion.

2. Source: CML Regulated Mortgage Survey

3. The Council of Mortgage Lenders does not publish statistics for mortgage approvals. The data in our monthly Regulated Mortgage Survey and gross lending press releases relate to mortgage advances only. A mortgage approval is the firm offer to a customer of a specific amount of credit secured against a particular property. A mortgage advance is the total amount of loan actually provided to the buyer, by the lender. Please see the mortgage statistics timeline on our website for further information.

4. Data for the second quarter of 2014 will be released on Wednesday 27 August 2014

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