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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First-time buyers in London up 17% in the third quarter

Published: 25 November 2015

New CML data on the characteristics of lending in Greater London in the third quarter of 2015 outlining mortgage lending to first-time buyers, home movers and remortgagors.

Lending in the third quarter 2015:

  • First-time buyer loans totalled 12,800 in London - up 17% on the previous quarter but down 1% on the third quarter in 2014. First-time buyers borrowed £3.4 billion - up 24% on the previous quarter and 4% on the same quarter in 2014.
  • There were 10,800 home-mover loans in London, up 32% on the previous quarter and 5% on the third quarter of 2014. Total value of these loans was £4bn, up 38% on the second quarter and 11% on the third quarter 2013.
  • Remortgage lending increased 8% by volume and 10% by value compared to quarter two. Compared to the third quarter last year, it was up 15% by volume and 25% by value.  

Paul Smee, director general of the CML, commented:

In London, as in the UK, the market has continued growth the past two quarters in both house purchase and remortgage activity. The number of people buying their home in London is at levels not seen since 2007, but this is still only 60% of the numbers seen at the height of the market. Borrowers appear to be taking advantage of relatively favourable economic conditions and this could mean a continual upward trajectory moving into the new year.

Chart 1: Loans for home-owner house purchase and for remortgage by value

 20151125 Greater London Q3 Chart 1 v2

Source: CML Regulated Mortgage Survey (April 2005 onwards)

Download the data

Chart 2: Number of loans for house purchase and proportion of FTBs and home-movers

 20151125 London Q3 2015 Chart 2

Source: CML Regulated Mortgage Survey (April 2005 onwards)

Download the data

Table 1: Third quarter lending for home-owner house purchase and remortgage

  Number of house purchase loans % change Value of house purchase loans, £m % change Number of remortgage loans % change Value of remortgage loans, £m % change
Third quarter 2015 23,600   7,390   12,800   3,630  
Change compared to second quarter 2015 19,200 +22.9% 5,620 +31.5% 11,900 +7.6% 3,310 +9.7%
Change compared to third quarter 2014 23,200 +1.7% 6,870 +7.6% 11,100 +15.3% 2,910 +24.7%

Source: CML Regulated Mortgage Survey (April 2005 onwards)

Lending for house purchase and remortgage  

House purchase lending in London saw a quarter-on-quarter and year-on-year rise, in both the number of loans and the amount borrowed, compared to the second quarter of 2015. This was the highest number of loans and most amount borrowed in a quarter in London since 2007. House purchase lending this quarter was driven mostly by first-time buyers, who made up 54% of all house purchase activity.   

Remortgage lending also saw a rise year-on-year and quarter-on-quarter in amount borrowed and in number of loans. This quarter had the highest number of remortgage loans since the first quarter of 2009, and the most amount borrowed for remortgage overall since the last quarter of 2008.

Table 2: Third quarter first-time buyer lending and affordability measures

 

Number of loans

% change

Value of loans £m

% change

Loan size (£)

Income (£)

Loan-to-value

Loan-to-income

Interest payment as % of income

Capital and interest payment as % of   income

Third quarter
2015

12,800

 

3,380

 

238,293

61,001

75.2%

3.85

9.1%

19.2%

Second quarter 2015

10,900

+17.4%

2,720

+24.3%

224,995

58,600

75.1%

3.82

9.5%

19.5%

Third quarter 2014

12,900

-0.8%

3,240

+4.3%

222,700

58,000

76.9%

3.86

11.8%

21.0%

Source: CML Regulated Mortgage Survey (April 2005 onwards)

Lending to first-time buyers

First-time buyers in London typically borrowed 3.85 times their gross household income, up from 3.82 the previous quarter and more than the UK average of 3.44.

The typical loan size for first-time buyers was £238,293 in the third quarter, up 6% on the second quarter and 7% on the same quarter last year. The typical gross income of a first-time buyer household was £61,001, up 4% compared to the second quarter and 5% up on the third quarter of 2014. 

First-time buyers' payment burden in the second quarter was 19.2% of gross income to cover capital and interest payments, down on the second quarter's 19.5% but higher than the 18.4% UK average.

Table 3: Third quarter home mover lending and affordability measures

 

Number of loans

% change

Value of loans £m

% change

Loan size (£)

Income (£)

Loan-to-value

Loan-to-income

Interest payment as % of income

Capital and interest payment as % of   income

Third quarter 2015

10,800

 

4,010

 

318,503

86,727

65.7%

3.79

7.7%

19.3%

Second quarter 2015

8,200

+31.7%

2,900

+38.3%

300,999

83,204

67.1%

3.76

8.2%

19.3%

Third quarter 2014

10,300

+4.9%

3,620

+10.8%

289,999

83,505

67.8%

3.69

10.2%

20.9%

Source: CML Regulated Mortgage Survey (April 2005 onwards)

Lending to home movers

Home movers in London typically borrowed 3.79 times their gross household income, up from 3.76 the previous quarter and higher than the UK average of 3.14.

The typical loan size for home movers was £318,503, which was up 6% on the previous quarter and 10% on the same period last year. The typical gross income of a home movers' household was £86,727, up 4% on the second quarter and 4% on the third quarter 2014. 

Home movers' payment burden in the third quarter saw them spend 19.3% of their gross household income to cover capital and interest payments, unchanged from the previous quarter but less than 20.9% in the same quarter in 2014. 

Chart 3: Number of home-owner remortgages

 20151125 London Q3 2015 Chart 3

Source: CML Regulated Mortgage Survey (April 2005 onwards)

Download the data

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 fourth quarter of 2015 will be released on Wednesday 24 February 2015.

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