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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Loans to first-time buyers up but movers down in London

Published: 24 August 2016

In the second quarter:

  • Home buyers in London borrowed £5.5bn for home-owner house purchase, down 23% quarter-on-quarter and 3% on a year ago. They took out 17,500 loans, down 17% on the previous quarter and 8% compared to the second quarter 2015.
  • First-time buyers borrowed £3.0bn, up 3% on the first quarter and 10% compared to the second quarter last year. This equated to 10,800 loans, up 3% quarter-on-quarter but down 1% year-on-year. 
  • Home movers borrowed £2.5bn, down 41% on quarter one this year and 14% compared to a year ago. This equated to 6,700 loans, down 37% quarter-on-quarter and 18% on quarter two 2015.
  • Remortgage activity totalled £4.3bn, up 6% on the first quarter 2016 and 29% compared to a year ago. This came to 14,200 loans, up 5% quarter-on-quarter and 19% compared to a year ago.

Paul Smee, director general of the CML, commented:

First-time buyers have continued to drive mortgage lending in London, with 10% more first-time buyer lending in the second quarter than a year ago.The opposite is time for home movers, probably just reflecting a rebalancing after the very strong first quarter as many buyers sought to complete purchases before changes to stamp duty.

The second quarter data largely pre-dates the EU referendum. While it will take time to see how Brexit may affect the market, the London mortgage market clearly remains active and firmly open for business.

Greater London house purchase lending in the second quarter

Quarter-on-quarter affordability metrics for first-time buyers show an increase in the typical amount borrowed, to £258,400 (£130,500 was the UK average) from £249,700. There was a rise in the total household income of borrowers in London to £64,500 (£40,000 was the UK average) from £62,900. Overall, the median income multiple increased from 3.93 to 3.98.

Among, London home movers, the average median advance decreased from £339,500 to £324,000 (£172,295 was the UK average), and household income decreased to £84,700 (£56,104 on average UK-wide) from £92,100, with the typical income multiple increasing  from 3.83 to 3.98.

Remortgage activity increased this quarter with the highest number of remortgage loans since the first quarter of 2009, and the highest value of remortgage lending in London since the last quarter of 2008.

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

 20160824 Greater London Q2 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

Q2 2015

10,900

8,200

11,900

Q1 2016

10,500

10,600

13,500

Q2 2016

10,800

6,700

14,200

Change on Q1 2016

+2.9%

-36.8%

+5.2%

Change on Q2 2015

-0.9%

-18.3%%

+19.3%

Table 2: Value of loans for house purchase and remortgage

 

House purchase (£m)

Remortgage (£m)

  FTBs Movers Home owners

Q2 2015

2,720 2,890 3,310

Q1 2016

2,890 4,180 4,020

Q2 2016

2,980 2,480 4,260

Change on Q1 2016

+3.1% -40.7% +6.0%

Change on Q2 2015

+9.6% -14.3% +28.7%

 

 20160824 Greater London Q2 2016 FTBs affordability infographic

20160824 Greater London Q2 2016 FTBs affordability infographic

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 third quarter of 2016 will be released on Wednesday 23 November 2016.

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