London house purchase lending dips in fourth quarter of 2015
House purchase lending in London declined in 2015 in comparison with the previous year, but remortgaging increased, according to new data from the Council of Mortgage Lenders.
Lending in the fourth quarter 2015:
- There were 21,800 home-owner house purchase loans – down 4% on the third quarter but up 5% compared to the fourth quarter 2014. These loans were worth £6.7bn – down 7% quarter-on-quarter but up 16% year-on-year.
- First-time buyer took out 12,000 loans in London – down 2% on the previous quarter but up 1% on the fourth quarter in 2014. These loans totalled in value £3.2bn – down 4% on the third quarter but up 11% on the fourth quarter of 2014.
- Home movers in the Capital took out 9,800 loans, worth £3.6bn – down 7% by volume and 9% by value on the previous quarter. Compared to the fourth quarter 2014, this was up 11% by volume and 22% by value.
- Remortgage lending increased 5% by volume and 8% by value compared to quarter three totalling £3.8bn (13,100 loans). Compared to the fourth quarter 2014, this was an increase of 34% in number of loans and 53% in amount borrowed for remortgage in the period.
Lending in 2015:
- The number of loans for home-owner house purchase in London decreased year-on-year to 81,600 loans (£24.5bn) – down 5% by volume but up 1% by value on 2014.
- First-time buyers took out 45,600, worth £11.6bn – down 6% by number of loans and 1% by amount borrowed compared to 2014.
- Home movers took out 35,900 loans (£12.9bn) – down 3% by volume but up 4% by value year-on-year.
- Remortgage lending totalled 48,600 loans, worth £13.7bn, which was up 14% by volume and 25% by value on 2014.
Paul Smee, director general of the CML, commented:
House purchase lending in London fell in 2015 due mainly to a slow start: later months of the year saw activity pick up again. Persisting supply and affordability issues, alongside the introduction of the Help to Buy London scheme, means there will be some uncertainty around how the market will perform going into 2016.
By contrast, remortgage activity, which has been consistently flat for the past few years, appears to be on an upward trend. Competitive mortgage rates appear to have sparked this activity and we have not seen quarterly volumes at this level since 2009.