The Council of Mortgage Lenders (CML) has reported that in the first quarter of 2017 home buyers in London borrowed £5.4bn for house purchase, down 3% quarter-on-quarter and 22% year-on-year.
They took out 16,700 loans, down 5% compared to the previous quarter and 19% on the first quarter 2016.
First-time buyers borrowed £2.8bn, down 5% on the fourth quarter and 3% on the first quarter last year. This equated to 10,000 loans, down 5% quarter-on-quarter and 3% year-on-year.
Meanwhile, home movers in the capital borrowed £2.7bn, unchanged quarter-on-quarter and down 35% compared to a year ago. This equated to 6,800 loans, down 3% quarter-on-quarter and 33% compared to the same quarter in 2016.
Remortgage activity totalled £4.2bn, up 13% on the fourth quarter and 7% compared to the same quarter last year. This came to 16,700 loans, down 5% quarter-on-quarter and 19% compared to a year ago.
Paul Smee, CML director general, said: “Home buyer activity in London has fallen for the second quarter in a row. A traditional seasonal dip in activity in the winter months is expected, but it has been more pronounced in London compared to the UK overall as persisting supply and affordability issues continue exerting ongoing restraint on growth. We do expect activity will pick up as we go forward into the summer months.
“By contrast, remortgage activity was at an eight-year high in London. Attractive mortgage deals aided by low interest rates appear to have sparked a resurgence in activity that has seen consecutive growth year-on-year every quarter for three year.”
First-time buyers typically borrowed £254,300 (£133,000 in the UK overall), down from £256,000. The average household income was £64,100 (£40,000 in the UK overall), unchanged from the previous quarter. The typical income multiple in London of 4.00 (down from the previous quarter) also compared to the UK average of 3.53.
Affordability metrics for home movers saw the typical amount borrowed this quarter was £345,300 (£175,000 in the UK overall), up from £340,000 the previous quarter. The average household income of a home mover was £89,300 (£54,600 in the UK overall), up from £88,600. This meant the typical home mover income multiple in London was 3.97, up from 3.96 the previous quarter and higher than the UK average of 3.34.