British Property Award Winner 2017 & 2018

  • Home
  • Profile
    • Careers
    • Corporate Responsibility
    • Our People
  • Sales
    • Marketing Your Property
    • Selling Your Property
    • Buying Guide
    • EPC Information
    • Area Guide
  • Lettings
    • Marketing Your Property
    • Property Management
    • EPC Information
    • Landlord Protection
    • Tenants Insurance
    • Tenants Charges
    • Landlord Charges
    • Area Guide
  • Housing
  • Development
  • Private Finance
  • News
  • Contact

Number of first time buyers in London reaches a three year high

28.11.12

A total of 10,000 first time buyers took out a mortgage in London in the third quarter of 2012, the highest number in the capital in a single quarter for almost three years, according to the first of a series of new quarterly reports on lending in London from the Council of Mortgage Lenders.

London’s housing market is unique as at 50%, the level of home ownership is the lowest in the UK, yet because the city is so large it has nevertheless accounted for 28% of the value of all first time buyer lending in the UK over the last year. 

First time buyers in London put down larger deposits than in other parts of the UK despite higher house prices and tougher affordability criteria. They bought properties with an average loan to value (LTV) ratio of 75%, a figure unchanged since the third quarter of 2008, and less than in the rest of the UK at 80%. 

While it may seem counter intuitive that London’s first time buyers put down larger deposits when house prices are higher and affordability more constrained, the characteristics of London’s first time buyers differ from the UK average in several key areas. 

First time buyers are older in London with an average age of 31 compared to the rest of the UK at 29. This means they have more time to build savings and achieve higher paying employment.

Parental assistance is greater in London. Recent estimates indicate that only 28% of first time buyers in London bought unassisted, compared to 34% in the UK overall.

Also their incomes are higher. The average first time buyer household in London had an income of £50,000 compared to £34,000 in the UK overall. They borrowed an average of 3.5 times their income with mortgage payments typically consuming 21.3%, compared to figures in the rest of the UK where the average income multiple amounted to 3.25 and 20.1% of income was taken by mortgage payments.

First time buyers in London make up a larger proportion of the total mortgage market at around 50% compared to around 40% in the UK overall, reflecting demographics in London where there tend to be more young people of a typical first time  buyer age.

Loans for house purchase in London increased in the third quarter, as in the rest of the UK. A total of 20,600 house purchase loans worth £5,070 million were advanced in London, up by 22% compared to the second quarter and a 4% increase compared to the same period last year.

This rate of growth compared favourably to the UK overall, where house purchase lending increased by 13% on the second quarter. The total value of loans for house purchase marked the highest figure since the last quarter of 2007.

Contributing to the increase in house purchase lending, lending to home movers rose by 18% compared to the second quarter. A total of 10,500 loans worth £2,950 million were advanced to home movers in London, slightly lower than the 10,600 loans taken out in the third quarter of 2011.

The LTV ratio for home movers fell in the third quarter and at 66% it is now at the same level as the first quarter of 2011. As in the UK overall, remortgage lending in London was weaker in the third quarter compared to both the previous quarter and the same quarter last year. A total of £2,050 million was advanced to borrowers remortgaging in the third quarter, down from £2,120 million in the second quarter, and a 16% fall compared to this time last year.

‘The London housing market faces similar issues to the rest of the UK in terms of a lack of supply and affordability, yet different demographics, population flows and tenure patterns mean that it is also unique,’ said CML director general Paul Smee.

'With the Mayor now directly responsible for housing strategy and investment in London, we look forward to seeing his finalised London Housing Strategy. Lenders want to be recognised as part of the solution and we will work constructively with the government and the GLA on deliverable solutions to London’s housing challenges,’ he added.

Archives

  • January 2019
  • December 2018
  • November 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • June 2016
  • May 2016
  • March 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • July 2015
  • February 2015
  • January 2015
  • December 2014
  • April 2014
  • March 2014
  • November 2013
  • October 2013
  • September 2013
  • August 2013
  • July 2013
  • June 2013
  • March 2013
  • January 2013
  • December 2012
  • November 2012
  • September 2012
  • August 2012
  • July 2012
  • June 2012
  • March 2012
  • February 2012
  • January 2012
  • December 2011
  • October 2011
  • September 2011
  • July 2011
  • June 2011
  • May 2011
  • April 2011
  • March 2011
  • February 2011
  • January 2011
  • December 2010
  • November 2010
  • October 2010
  • September 2010
  • August 2010
  • July 2010

Latest News

16-01-19

Tenant Fees Bill passes Third Reading in Lords...

09-01-19

Madison Brook Homes is partnered with Lampton 360

Contact

Barking

  • [email protected]
  • Tel: +44 (0)20 3946 6300

Docklands

  • [email protected]
  • Tel: +44 (0)20 3946 6000

Greenwich

  • [email protected]
  • Tel: +44 (0)20 3946 6100

Lewisham/Blackheath

  • [email protected]
  • Tel: +44 (0)20 3946 6200

West End

  • [email protected]
  • Tel: +44 (0)20 3946 6400

Twickenham

  • [email protected]
  • Tel: +44 (0)208 6223612

Links

Our People

Area Guide

Buying Guide

Social Call