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.

  1. Home
  2. News
  3. Press releases
  4. Home buyers in London down 19% in the first quarter compared to a year ago

Home buyers in London down 19% in the first quarter compared to a year ago

Published: 24 May 2017

In the first quarter:

  • Home buyers borrowed £5.4bn for house purchase, down 3% quarter-on-quarter and 22% year-on-year. They took out 16,700 loans, down 5% compared to the previous quarter and 19% on the first quarter 2016.
  • First-time buyers borrowed £2.8bn, down 5% on the fourth quarter and 3% on the first quarter last year. This equated to 10,000 loans, down 5% quarter-on-quarter and 3% year-on-year. 
  • Home movers borrowed £2.7bn, unchanged quarter-on-quarter and down 35% compared to a year ago. This equated to 6,800 loans, down 3% quarter-on-quarter and 33% compared to the same quarter in 2016.
  • Remortgage activity totalled £4.2bn, up 13% on the fourth quarter and 7% compared to the same quarter last year. This came to 14,200 loans, up 10% quarter-on-quarter and 8% compared to a year ago.

Paul Smee, CML director general, commented:

Home buyer activity in London has fallen for the second quarter in a row. A traditional seasonal dip in activity in the winter months is expected, but it has been more pronounced in London compared to the UK overall as persisting supply and affordability issues continue exerting some restraint on growth. We do expect activity will pick up as we go into the summer months.

By contrast, remortgage activity was at an eight-year high in London. Attractive mortgage deals aided by low interest rates appear to have sparked a resurgence in activity that has seen consecutive growth year-on-year every quarter for three year.

Affordability in London

First-time buyers typically borrowed £254,300 (£133,000 in the UK overall), down from £256,000. The average household income was £64,100 (£40,000 in the UK overall), unchanged from the previous quarter. The typical income multiple in London of 4.00 (down from the previous quarter) also compared to the UK average of 3.53.

Affordability metrics for home movers saw the typical amount borrowed this quarter was £345,300 (£175,000 in the UK overall), up from £340,000 the previous quarter. The average household income of a home mover was £89,300 (£54,600 in the UK overall), up from £88,600. This meant the typical home mover income multiple in London was 3.97, up from 3.96 the previous quarter and higher than the UK average of 3.34.

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

20170522 Q1 2017 London MLT chart 1

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

Q1 2016

10,300 10,200 13,100

Q4 2016

10,500 7,000 12,900

Q1 2017

10,000 6,800 14,200

Change compared to Q4 2016

-4.8% -2.9% +10.1%

Change compared to Q1 2016

-2.9% -33.3% +8.4%

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

Q1 2016

2,850 4,090 3,920

Q4 2016

2,910 2,680 3,700

Q1 2017

2,760 2,670 4,180

Change compared to Q4 2016

-5.2% -0.4% +13.0%

Change compared to Q1 2016

-3.2% -34.7% +6.6%

 20170522 London first time buyers affordability inforgraphic

20170522 London home movers affordability inforgraphic

 

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 second quarter of 2017 will be released on Wednesday 23 August 2017.

Contact us

Gareth Hill

020 7438 8922