First time buyer mortgages in London at three year high
Mortgages completed by first time buyers in London during the third quarter reached the highest level in three years.
Figures from UK Finance show there were 11,700 new first time buyer mortgages completed in London in the third quarter 2018 some 2.6% higher than the same quarter last year.Jackie Bennett Director of Mortgages at UK Finance said, London’s mortgage market remained resilient in the third quarter of this year, despite an uncertain economic environment.
New lending values in the capital were 6.0% higher year-on-year at £3.55 billion with the age of first time buyers at 32 years and average earning £69,700.
Demand to remain strong
Demand from first time buyers in London has been boosted by schemes such as Help to Buy and is likely to remain strong.The recent extension of the scheme until 2023 will help even more people get a foot on the housing ladder in the years ahead, says Jackie Bennett.
Help to Buy can be accessed by first time buyers and home movers on new build properties only receiving an interest free loan of up to 20% from the government.
Home buyers need a 5% deposit and the balance of 75% is a mortgage from a lender for house prices up to £600,000.
In London the interest free loan is 40% of the purchase price requiring only 5% deposit and the remaining 55% is a competitive mortgage as the lender.
First time buyers in the capital borrow £281,500 on average at multiples of loan to income of 4.07 times with loan to values of 75.1% and deposit of 24.9% for the third quarter.
Figures are lower for the country where the average mortgage is £145,495 on income multiples of 3.69 times with loan to values of 85.0% and deposit of 15.0%.
Homeowners actively remortgage
The number of remortgage buyers in London increased by 3.4% to 15,200 compared to the same quarter last year with the value of loans increasing 4.6% to £4.76 billion.Jackie Bennett said, remortgaging continues to be strong, reflecting the large number of fixed rate loans coming to an end as well as customers desire to lock into new competitive rates.
For older homeowners there is higher activity with equity release buyers using a lifetime mortgage lump sum plan to receive tax free cash of £96,207 or drawdown plans to access £64,184.
In the country there is strong growth with 13,800 buy-to-let landlords remortgaging up 4.5% over the year to August due in part to the number of two year fixed deals coming to an end.
In contrast the number of loans to home movers in the capital have decreased by 4.7% to 8,100 year-on-year with the value of loans flat at £3.49 billion.
The average mortgage for home movers is £370,547 on income multiples of 4.01 times with loan to values of 68.1% and deposit of 31.9%.
What are your next steps?
Call our LCM mortgage brokers for advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or are a buy-to-let investor.For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property to repay an interest only mortgage or buy a more expensive home.
Learn more by using the property value tracker chart, mortgage monthly costs calculator and equity release calculator. Start with a free mortgage quote or call us and we can take your details.
Mortgage Best Buys
These are examples of mortgage products we can approach with many more offering interest rates and flexibility to meet your needs.
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| 1.17% Fixed Rate |
| 60% Loan to Value |
| £1,025 App Fee |
| Until 31/09/2022 |
| Reverts to 3.59% |
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| 1.18% Fixed Rate |
| 60% Loan to Value |
| £1,034 App Fee |
| Until 31/10/2022 |
| Reverts to 3.59% |
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| 1.19% Fixed Rate |
| 60% Loan to Value |
| £999 App Fee |
| 2-Years Time |
| Reverts to 3.59% |
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| 1.16% Fixed Rate |
| 60% Loan to Value |
| £1,525 App Fee |
| Until 01/11/2022 |
| Reverts to 4.09% |
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Equity Release may involve a Lifetime Mortgage or a Home Reversion Scheme. To understand the features and risks, please ask for a personalised illustration. Equity Release may affect your entitlement to means tested state benefits and will impact on the size of your estate. For Equity Release London City Mortgages charge a fixed fee upon completion of £695. For Mortgages a fixed fee is charged on application. Typically this is from £295 up to £495 for the services selected.
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