The London property market usually enters a quiet period in the quarter from January to March, but this year it hasn’t happened.
The Council of Mortgage Lenders (CML) has issued the quarter’s results for London, and far from a dip, there was a rise of 6% in the first quarter – and that brings the rise to 41% over last year’s prices. There was a slight decrease in the number of loans taken out, but only compared to the quarter before. The year-on-year figures show a 20% rise in loans in Q1 2016 compared to Q1 2015.
First-Time Buyers Feature Strongly
Figures for first-time buyers followed this trend – slightly down (7%) from the quarter before, but 20% up compared to Q1 2015. The London market has more first-time buyers than the rest of the country, even though proportionately fewer people own their homes n London.
Because of the high price of London property, the totals borrowed are staggering – £4.2 billion in Q1 2016. And it looks as though these are mainly “real” property purchases by home movers. This is good news for the market in terms of supply, because nearly every purchase of a home releases another property lower down the housing ladder on to the market.
Remortgages also performed strongly (up 4% on Q4 2015), but not as strongly as new loans. This was the highest level of remortgage activity in a quarter since 2009. It appears that the financial crisis is well and truly behind us. Or perhaps London really is unique.
Affordability Remains Key
Affordability is a problem. In the rest of the UK, a first-time buyer borrows on average £130,500. In London, it’s £243,746 – heading towards double the amount of the rest of the country. Londoners have much higher household incomes than non-Londoners – £62, 508 compared to £40,000.
However, because of low interest rates, the percentage of gross income that Londoners are spending on their mortgages (interest and capital) is only 19%. You can contact http://boweryldn.com/ to find out about property buying in the metropolis.
Property buying agents in London are sure that London market has plenty more surprises in store.
It’s a unique market not only in the UK but also when looked at in comparison with other countries.