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Lending to London first-time buyers reaches six-year high

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Lending to first-time buyers in London has reached its highest level since 2007, figures have revealed.
Lending to London first-time buyers reaches six-year high

Council of Mortgage Lender data shows loans to London first-time buyers jumped 33% between the first and second quarters to reach £2.49bn, 47% higher than the same time last year.

The 11,200 loans represented the largest quarterly figure since the end of 2007.

The value of loans to Scottish first-time buyers also soared by 54% between the first and second quarters of 2013 to reach £630m. Gross mortgage lending to first-time buyers in Wales and Northern Ireland also rose.

Masons Financial Planning principal Dean Mason, whose business is based near London, said he had never been busier in the summer months: “Since the middle of June I have been running at full capacity. Roughly 40% of my current cases are first-time buyers.”

However, he said he had known many of the first-time buyers for a year or more and not one of them had used a government scheme to buy their property: “They have saved up or Mum and Dad have decided to help or grandparents have left them money. They have been thinking about it for over a year and this is the year they have decided to take the plunge.”

Many clients also told him they had decided to buy in the summer because the spring was too cold to look at properties, he added.

All areas saw a boost to lending for house purchase as a result of the growth in first-time buyers, and remortgage lending picked up after a subdued period. In London, lenders increased remortgage lending by 31% compared to the previous quarter and advanced a total £2.4bn to borrowers. Remortgage lending in Scotland leapt 35% on Q1, in Wales it rose by 19% and in Northern Ireland by 22%.

Council of Mortgage Lenders director general Paul Smee said: “Mortgage lending in London has followed a similar pattern to the rest of the UK with strong house purchase activity this quarter, strengthened particularly by first-time buyer activity.

“Total lending for house purchase has also increased this quarter upon last and from a year ago which suggests increasing confidence that economic conditions are becoming more favourable.”

CML Scotland chair Iain Malloch said: “With comparatively lower prices in Scotland than in the UK as a whole, first time buyers are able to borrow less relative to income. There is clearly value in the Scottish market which provides a great opportunity to get on the housing ladder.”

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