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Greater London saw a decline in the level of house purchase and remortgage lending both year on year and quarter on quarter at the end of 2014, according to the latest data from the Council of Mortgage Lenders. First time buyers in Greater London borrowed £2.9 billion, down compared to the third quarter by 11% in value and down 7% in number of loans. Compared to the fourth quarter of 2013, the total number of loans was down 10% and the amount borrowed decreased by 4%. Home movers saw a decrease in numbers to 8,800 loans, valued at £2.9 billion, which was down 15% by volume and down 20% by value compared to the third quarter. Compared to the fourth quarter of 2013, there was a decrease of 15% by volume and down 9% by value. Remortgage lending declined in the fourth quarter totaling 9,800 loans at £2.5 billion, which was down 12% by volume and down 13% by value. Compared to the fourth quarter of 2013, remortgage lending in London was down 13% by volume and 11% by value. The data also shows that overall lending in Greater London accounted for 21.5% of UK wide house purchase activity, down from 22.6% in 2013. First time buyer affordability changed slightly in Greater London quarter on quarter with first time buyers typically borrowing 3.84 times their gross income, less than the 3.86 income multiple in the third quarter but more than the UK average of 3.38. The typical loan size for first time buyers was £216,000 in the fourth quarter, down from £222,275 in the previous quarter. The typical gross income of a first time buyer household was £56,314 compared to £58,000 in the third quarter. The CML says that first time buyers' payment burden remaining relatively low in the fourth quarter at 20.8% of gross income being spent to cover capital and interest payments, lower than the third quarter's 21%. Home mover affordability changed fractionally, with home movers typically borrowing 3.64 times their gross income compared 3.69 in the third quarter and to 3.03 for the UK overall. The typical loan size for home movers was £276,355 in fourth quarter, up from £289,999 in the previous quarter. The typical gross household income of a home mover was £80,160 in fourth quarter compared to £83,592 in the third quarter. Home movers' payment burden in London was on average 20.5% of gross income being spent to cover monthly capital and interest payments, less than the 20.9% in the third quarter but more than the 18.8% UK average. ‘London is a unique market, with equally unique conditions and challenges, which will need a focus on all types of housing tenure going forward,’ said Paul Smee, director general of the CML. ‘Last year had the highest annual level of borrowers buying a home in London since 2007, with first time buyers leading that growth, but there have been recent signs of the market cooling. The dip in the last quarter of… Continue reading →
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