For the second quarter in a row the number of home buyers are lower in London due to restricted supply and affordability.
Data from the Council of Mortgage Lenders (CML) showed London home buyers are struggling with the numbers falling -18% from 20,600 mortgage loans in the first quarter in 2016 to 16,800 this year.
This includes first time buyers lower by only -2.9% to 10,000 mortgage loans but home movers down -33.3% to 6,800 loans arranged.
The total value of borrowing was also lower with £6.9 billion of loans last year reducing to £5.4 billion in the first quarter of 2017.
Remortgages at an eight year high
Paul Smee, CML director general said remortgage activity was at an eight-year high in London with attractive mortgage deals aided by low interest rates appear to have sparked a resurgence in activity.
Remortgage activity totalled £4.2 billion up 13% on the fourth quarter and 7% compared to the same quarter last year with activity of £3.9 billion.
The number of mortgage loans quarter-on-quarter were up by 10% to 14,200 and this was 8% higher compared to 13,100 a year ago.
Homeowners securing new mortgage deals were far more active in London compared to new house purchase activity that reduced for the second quarter in a row.
For older homeowners there is significantly higher activity with equity release buyers in London accessing wealth in their property to help maintain their standard of living.
A traditional seasonal dip in activity is expected, but it has been more pronounced in London compared to the UK overall as persisting supply and affordability issues continue exerting some restraint on growth, says Mr Smee.
Affordability in London unchanged
There was little change in the ability of Londoners to afford to buy a home in the capital with first-time buyers typically borrowed £254,300 down from £256,000 compared to only £133,000 in the UK overall.
The average household income was £64,100 with typical income multiple in London of 4.00 compared to £40,000 incomes and income multiples on 3.53 in the UK overall.
Affordability metrics for home movers saw the typical amount borrowed this quarter was £345,300 up from £340,000 the previous quarter and significantly higher than the £175,000 in the UK overall.
The average household income was £89,300 with typical income multiple in London of 3.97 compared to £54,600 incomes and income multiples on 3.34 in the UK overall.
The Council of Mortgage Lenders expect activity will pick up as we go into the summer months, says Mr Smee.
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