Advances to first-time buyers in London remained flat year-on-year in the first quarter, although the Council of Mortgage Lenders called the figures “positive” because last year’s figures were boosted by the end of the stamp duty holiday.
In the first quarter of this year there were 9,400 loans advanced to first-time buyers in the Greater London area, exactly the same as the first quarter the year before.
The total value of these advances was also flat at around £1.8bn in both Q1 2012 and Q1 2013.
However, the trade body points out that the stamp duty exemption for people buying homes up to £250,000 ended at the end of the first quarter of 2012, potentially providing an artificial boost to the number of loans advanced in Q1 last year.
CML director general Paul Smee says: “Lending activity in London was largely similar to the same period last year, a positive picture bearing in mind the significant boost to the market caused by the end of the stamp duty holiday in March last year.”
The average loan-to-value ratio for first-time buyers remained at 75 per cent for London borrowers, below the 80 per cent seen in the UK overall.
Lending to home movers in London dipped in Q1. A total of 8,000 loans, worth £2.3bn, were advanced to home movers in Q1, an 18 per cent fall compared to the fourth quarter of last year, when 9,700 loans were advanced to borrowers, worth £2.7bn. The number of advances were also down 5 per cent year-on-year, from 8,400 loans worth £2.3bn in Q1 2012.
However, the London home movers market fared better than the UK as a whole, which saw the number of advances fall 9 per cent year-on-year, from 71,600 in Q1 2012 to 65,300 in the first quarter of this year.
Total house purchase lending fell 2 per cent year-on-year from 17,800 loans, worth £4bn, to 17,400, worth £4.1bn, in the first quarter of 2013. However, this may have also been affected by the ending of the stamp duty holiday.
Remortgage lending in London remained subdued. A total of 8,500 loans were advanced to borrowers in the first quarter of 2013, worth £1.8bn, a fall of 16.6 per cent from the 10,200 loans advanced in Q1 2012, worth £2.2bn.
The CML also surveyed 8,183 borrowers – 1,285 of whom live in London – in March, half of whom said they would like to buy a new home to live in (a first home or subsequent home) in the next two to three years.
Moreover, it found that 75 per cent of adults currently living in London would like to own their own home within 10 years time, which was slightly lower than the UK picture as a whole, at 79 per cent.
Smee adds: “These figures show that higher house prices and tougher affordability constraints in London have not had a significant impact on consumer appetite to buy or move home in the capital. A similar percentage of those who live in London want to be home-owners despite differences in demographics and population flows.”