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  4. London home buyers down 3% in fourth quarter 2016

London home buyers down 3% in fourth quarter 2016

Published: 22 February 2017

In the fourth quarter:

  • Home buyers borrowed £5.9bn for house purchase, down 5% quarter-on-quarter and 13% year-on-year. They took out 18,500 loans, down 3% compared to the previous quarter and 15% on the fourth quarter 2015.
  • First-time buyers borrowed £3bn, down 3% on the third quarter and 4% on the fourth quarter last year. This equated to 11,000 loans, down 2% quarter-on-quarter and 7% year-on-year. 
  • Home movers borrowed £2.8bn, down 8% quarter-on-quarter and 21% compared to a year ago. This equated to 7,400 loans, down 6% quarter-on-quarter and down 24% compared to the same quarter in 2015.
  • Remortgage activity totalled £3.9bn, down 13% on the third quarter but unchanged compared to the same quarter last year. This came to 13,400 loans, down 8% quarter-on-quarter but up 2% compared to a year ago.

In 2016:

  • Home buyers in London borrowed £24.5bn for house purchase, down 0.4% on 2015. They took out 75,800 loans, down 7% compared to the year before.
  • First-time buyers borrowed £11.9bn, up 3% on the previous year. This totalled 43,300 loans, down 5% on 2015. 
  • Home movers borrowed £12.5 billion, totalling 32,400 loans, down 3% by value and 10% by volume on 2015.
  • Remortgage activity totalled £16.5bn, up 21% on 2015. This came to 55,500 loans, up 13% in 2015.

Paul Smee, CML director general, commented:

The number of home buyers in London fell to a four year low in 2016. Home mover activity in particular continues a downward trend, with the fewest loans since 1991. Persisting supply and affordability issues appear to be exerting an ongoing restraint on growth, meaning there is some uncertainty around how the market will perform going into 2017.

By contrast, remortgage activity appears to be experiencing a resurgence. Competitive mortgage rates aided by low interest rates have sparked remortgage levels not seen in the Capital since 2008. 

Affordability in London

First-time buyers typically borrowed £254,000 (£135,000 in the UK overall), down from £260,000. The average household income was £63,700 (£40,200 in the UK overall), down from £64,700. The typical income multiple in London of 4.02 (unchanged from the previous quarter) also compared to the UK average of 3.56.

Affordability metrics for home movers saw the typical amount borrowed this quarter was £335,400 (£172,500 in the UK overall), down from £336,800 the previous quarter. The average household income of a home mover was £87,300 (£54,900 in the UK overall), down from £87,600. This meant the typical home mover income multiple in London was 3.97, unchanged from the previous quarter but higher than the UK average of 3.29.

Chart 1: Number of loans to home-owners, 2007-2016

Chart showing the number of loans for house purchase and remortgage in Greater London

Source: CML Regulated Mortgage Survey

Download data

Table 1: Number of loans for house purchase and remortgage in the fourth quarter of 2016

 

House purchase

Remortgage

 

FTBs

Movers

Home owners

Q4 2015

11,800

9,800

13,200

Q3 2016

11,200

7,900

14,500

Q4 2016

11,000

7,400

13,400

Change compared to Q3 2016

 -1.8%

-6.3%

-7.6%

Change compared to Q4 2015

 -6.8%

-24.5%

+1.5%

Table 2: Value of loans for house purchase and remortgage in the fourth quarter of 2016

 

House purchase (£m)

Remortgage (£m)

  FTBs Movers Home owners

Q4 2015

3,140 3,570 3,870

Q3 2016

3,110 3,050 4,430

Q4 2016

3,030 2,820 3,860

Change compared to Q3 2016

 -2.6% -7.5% -12.9%

Change compared to Q4 2015

 -3.5% -21.0% -0.3%

Table 3: Number of loans for house purchase and remortgage in 2016

 

House purchase

Remortgage

  FTBs Movers Home owners

2015

45,500 35,900 48,900

2016

43,300 32,400 55,500

Change year-on-year

-4.8% -9.7% +13.5%

Table 4: Value of loans for house purchase and remortgage in 2016

 

House purchase (£m)

Remortgage (£m)

  FTBs Movers Home owners

2015

11,610 12,940 13,700

2016

11,940 12,490 16,520

Change year-on-year

+2.8% -3.5% +20.6%

20170224 London q4 2016 first time bueyrs affordability

20170224 London q4 2016 home movers affordability

Notes to editors

1. The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 97% of all residential mortgage lending in the UK. There are 11.1 million mortgages in the UK, with loans worth over £1.3 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 first quarter of 2017 will be released on Wednesday 24 May 2017.

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