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.

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London house purchase and remortgage lending up year-on-year in first quarter of 2016

Published: 25 May 2016

On an unadjusted basis:

  • Home buyers in London borrowed £7.1bn for house purchase in the first quarter of 2016, up 6% quarter-on-quarter and 41% on a year ago. They took out 21,400 loans, down 2% on the previous quarter but up 20% compared to the first quarter 2015.
  • First-time buyers borrowed £2.9bn, down 7% on the fourth quarter 2015 but up 19% on the first quarter last year. This equated 10,700 loans, down 10% quarter-on-quarter but up 3% year-on-year. 
  • Home movers borrowed £4.2bn, up 18% quarter-on-quarter and 63% compared to a year ago. This equated to 10,600 loans, up 8% quarter-on-quarter and 43% on quarter one 2015.
  • Remortgage activity totalled £4bn, up 4% on the fourth quarter 2015 and 36% compared to a year ago. This came to 13,500 loans, up 2% quarter-on-quarter and 21% compared to a year ago.

Paul Smee, director general of the CML, commented:

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.

The housing market in Greater London has some unique characteristics compared to the rest of the UK - more first-time buyers, but lower overall levels of home-ownership. 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.

 

London was the focus of a recent CML News & Views article that took a more in-depth look at the key issues affecting the market. It can be read here.

Greater London house purchase and remortgage lending in the first quarter

Quarter-on-quarter affordability metrics for first-time buyers show that the amount borrowed increased to £248,047 (£130,500 was the UK average) from £243,746, but this was offset by a rise in the total household income of borrowers to £62,508 (£40,000 was the UK average) from £61,155 meaning the median income multiple remained virtually unchanged from 3.94 to 3.93.

London home movers saw a similar trend to £338,500 (£172,295 was the UK average) from £315,995 the previous quarter, and household income increased to £91,862 on average (£56,104 on average UK-wide) from £84,313 meaning the income multiple decreased slightly from 3.87 to 3.83.

The proportion of monthly gross income home buyers are spending on capital and interest repayments was 19.0%, which was the lowest level since we began tracking this metric in 2005. 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.

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

 20160525 Greater London Q1 2016 press release chart one

Source: CML Regulated Mortgage Survey       

Download data

Table 1: Number of loans for house purchase and remortgage

 

House purchase

Remortgage

 

FTBs

Movers

Home owners

Q1 2015

10,400

7,400

11,200

Q4 2015

11,900

9,800

13,200

Q1 2016

10,700

10,600

13,500

Change on Q4 2015

-10.1%

+8.2%

+2.3%

Change on Q1 2015

+2.9%

+43.2%

+20.5%

Table 2: Value of loans for house purchase and remortgage

 

House purchase (£m)

Remortgage (£m)

  FTBs Movers Home owners

Q1 2015

2,480 2,570 2,950

Q4 2015

3,150 3,570 3,860

Q1 2016

2,940 4,200 4,000

Change on Q4 2015

-6.7% +17.6% +3.6%

Change on Q1 2015

+18.5% +63.4% +35.6%

London Q1 2016 FTBs affordability infographic

London Q1 2016 Home movers affordability infographic

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 for all home-owner mortgage data.

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. Second quarter London data will be released on Wednesday 24 August 2016.

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