From 1st July the Council of Mortgage Lenders is integrated into a new trade association, UK Finance. For the time being, all UKF mortgage information will continue to be published on this website, and UKF member-only mortgage information will only be available here.

UK Finance represents around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation takes on most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association. Please go to www.ukfinance.org.uk for wider content and updates from UK Finance.

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Lending in London grew strongly in third quarter

Published: 23 November 2017

In the third quarter of 2017 in London:

  • Home buyers borrowed £6.74 billion for house purchase, up 10 per cent quarter-on-quarter and 13 per cent year-on-year. They took out 19,600 loans, up nine per cent compared to the previous quarter and six per cent on the third quarter of 2016.
  • First-time buyers borrowed £3.31 billion, up seven per cent on the second quarter and nine per cent on the third quarter of last year. This equated to 11,200 loans, up six per cent quarter-on-quarter and three per cent year-on-year.
  • Home movers borrowed £3.44 billion, up 14 per cent quarter-on-quarter and 17 per cent compared to a year ago. This equated to 8,400 loans, up 14 per cent quarter-on-quarter and 11 per cent compared to the same quarter in 2016.
  • Remortgaging activity totalled £4.49 billion, up 15 per cent on the second quarter and four per cent compared to the same quarter last year. This came to 14,500 loans, up 12 per cent quarter-on-quarter and three per cent compared to a year ago.

Commenting on the data, UK Finance’s head of mortgage policy June Deasy said:

“Affordability remains challenging in London, but borrowing by first-time buyers grew strongly in the third quarter and reached its highest level for a decade.  Borrowing by home movers grew even more strongly, but remained below its recent peak in the first quarter of 2016, when activity was boosted by the impending increase in stamp duty.  Remortgaging was also robust as London borrowers sought to lock into historically low borrowing rates ahead of the widely anticipated increase in base rate.”

Affordability in London

First-time buyers typically borrowed £275,000 (£139,500 in the UK overall), up from £268,747 in the previous quarter. The average household income was £67,737 (£41,009 in the UK overall), up from £66,961 three months earlier.  The typical income multiple in London of 4.06 (up from 4.02 in the previous quarter) was higher than the UK average of 3.61.

The average home mover borrowed £353,995 in the third quarter (£180,995 in the UK overall), up from £353,499 in the preceding three months.  The average household income of a home mover was £91,940 (£55,865 in the UK overall), up from £91,329.  This meant that the typical home owner income multiple in London was 4.01, the same as in the preceding quarter and higher than the UK average of 3.39.

Chart 1: Number of loans to home-owners, 2007-2017

Table 1: Number of loans for house purchase and remortgaging in the third quarter

  House purchase Remortgage
FTBs Movers  
Q3 2016

10,900

7,600

14,100

Q2 2017

10,600

7,400

12,900

Q3 2017

11,200

8,400

14,500

Change compared to Q2 2017

5.7%

13.5%

12.4%

Change compared to Q3 2016

2.8%

10.5%

2.8%

Table 2: Value of loans for house purchase and remortgaging in the third quarter

  House purchase (£m) Remortgage (£m)
FTBs Movers  
Q3 2016

3,040

2,950

4,320

Q2 2017

3,090

3,020

3,920

Q3 2017

3,310

3,440

4,490

Change compared to Q2 2017

7.1%

13.9%

14.5%

Change compared to Q3 2016

8.9%

16.6%

3.9%

Affordability infographic

Ends

For further information please contact:
Press Office
020 7416 6750
press@ukfinance.org.uk

Notes to editors

  1. UK Finance is a new trade association which was formed on 1 July 2017 to represent the finance and banking industry operating in the UK. It represents around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation brings together activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association.