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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London house purchase lending down 16% year-on-year in first quarter

Published: 27 May 2015

New CML data on the characteristics of lending in Greater London in the first quarter of 2015 show a decline in house purchase lending but increased remortgage activity. 

Quarterly highlights

First-time buyers in Greater London borrowed £2.4bn representing 10,100 loans. This was down compared to the fourth quarter 2014 by 16% in value and down 16% in number of loans. Compared to the first quarter of 2014, the total number of loans was down 14% and the amount borrowed decreased by 11%.

Home movers saw a decrease in numbers to 7,200 loans advanced in the period, valued at £2.5bn, which was down 18% by volume and down 15% by value on the previous quarter. Year-on-year comparisons show a decrease of 18% by volume and down 11% by value.

Remortgage lending increased totalling 10,800 loans (£2.9bn), which was up 10% by volume and up 13% by value. Compared to the first quarter of 2014, remortgage lending in London was up 2% by volume and 8% by value.

Lending for house purchase

Home-owner house purchase in Greater London decreased in the first quarter of 2015 to 17,300 loans, which was down 17% compared to the fourth quarter 2014 and a year-on-year decline of 16% compared to the first quarter of 2014. These loans by value were £4.9bn, down 16% compared to the fourth quarter last year and down 11% on the first quarter of 2014.

Chart 1: Total number of home-owner house purchase loans advanced in Greater London per quarter

 Chart of total number of home-owner house purchase loans advanced in Greater London per quarter

 Source: CML

Lending to first-time buyers

First-time buyer affordability changed slightly in Greater London quarter-on-quarter with first-time buyers typically borrowing 3.86 times their gross income, more than the 3.84 income multiple in the fourth quarter last year and more than the UK average of 3.37.

The typical loan size for first-time buyers was £213,750, down from £216,000 in the previous quarter. The typical gross income of a first-time buyer household was £55,687 compared to £56,333 in the fourth quarter 2014.

First-time buyers' payment burden in the first quarter was 20.5% of gross income being spent to cover capital and interest payments, lower than the previous quarter's 20.9%.

Chart 2: Total number of first-time buyer loans advanced in Greater London per quarter

Chart of Total number of first-time buyer loans advanced in Greater London per quarter

Source: CML

Lending to home movers

Home mover affordability changed fractionally, with home movers typically borrowing 3.70 times their gross income compared to 3.64 in the fourth quarter 2014 and 3.04 for the UK overall.

The typical loan size for home movers was £293,250, up from £276,999 in the previous quarter. The typical gross household income of a home mover was £82,120 compared to £80,262 in the previous quarter.

Home movers' payment burden in London was on average 20.1% of gross income being spent to cover monthly capital and interest payments, less than the 20.5% in the fourth quarter 2014 but higher than the 18.8% UK average.

Chart 3: Total number of home mover loans advanced in Greater London per quarter

Chart of total number of home mover loans advanced in Greater London per quarter

Source: CML

Lending to home owners for remortgage

Remortgage lending increased to 10,800 loans (£2.9bn), which was up 10% by volume and up 13% by value. Compared to the first quarter of 2014, remortgage lending in London was up 2% by volume and 8% by value.

Chart 4: Total number of remortgage loans advanced in Greater London per quarter

Chart of total number of remortgage loans advanced in Greater London per quarter

Source: CML

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 11.1 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 second quarter of 2015 will be released on Wednesday 26 August 2015.

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Gareth Hill

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