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First-time buyer borrowing in London hits highest level since 2007

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First-time buyers in London borrowed £3.31bn in the three months to October, a 7% increase on the second quarter, and the highest level in 10 years, industry data showed.

There were 11,200 loans to new owners in the capital, up 6% quarter-on-quarter and 3% year-on-year, according to UK Finance figures.

Overall home buyers in London borrowed £6.74bn, up a sizeable 10% quarter-on-quarter and 13% year-on-year, while remortgaging totalled £4.49bn, up 15% from the second quarter and 4% from the same period last year.

UK Finance’s head of mortgage policy June Deasy said: “Affordability remains challenging in London, but borrowing by first-time buyers grew strongly in the third quarter and reached its highest level for a decade.”

First-time buyer borrowing was also strong in Wales during third quarter of 2017, with £510m of mortgages, up 4% on the second quarter and 13% on the same period last year, regional analysis by the trade body showed.

In Scotland first-time buyer borrowing dipped 2% in the third quarter to £1.04bn – although this is an increase of 11% from the third quarter of 2016.

And in Northern Ireland first-time buyers borrowed £260m, up 8% from the second quarter and 24% on the third quarter last year.

Vast differences in affordability

Julie-Ann Haines, the chair of UK’s Finance’s Wales mortgage committee said: “Help to Buy Wales has made a positive contribution to the housing market, and we look forward to the Welsh government announcing its plans for the scheme in future.”

Affordability for first-time buyers in Wales and Scotland remained better than for the UK overall, with an average £109,250 £101,000 borrowed respectively, compared to £139,500 in the UK overall and £275,000 in London.

The average household income of a first-time buyer in Wales and Scotland was £33,904 and £33,608 respectively, compared to £41,009 in the UK overall and £67,737 in London.

The typical income multiple in Wales and Scotland was 3.32 and 3.09 respectively, below the UK average of 3.61 and London of 4.06.

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