UK Finance has reported that, in the third quarter of 2017 in London, home buyers borrowed £6.74 billion for house purchase, up 10% quarter-on-quarter and 13% year-on-year.
They took out 19,600 loans, up 9% compared to the previous quarter and 6% on the third quarter of 2016.
First-time buyers borrowed £3.31 billion, up 7% on the second quarter and 9% on the third quarter of last year. This equated to 11,200 loans, up 6% quarter-on-quarter and 3% year-on-year.
Meanwhile, home movers borrowed £3.44 billion, up 14% quarter-on-quarter and 17% compared to a year ago. This equated to 8,400 loans, up 14% quarter-on-quarter and 11% compared to the same quarter in 2016.
In addition, remortgaging activity totalled £4.49 billion, up 15% on the second quarter and 4% compared to the same quarter last year. This came to 14,500 loans, up 12% quarter-on-quarter and 3% compared to a year ago.
June Deasy, UK Finance’s head of mortgage policy, 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. Borrowing by home movers grew even more strongly, but remained below its recent peak in the first quarter of 2016, when activity was boosted by the impending increase in stamp duty.
“Remortgaging was also robust as London borrowers sought to lock into historically low borrowing rates ahead of the widely anticipated increase in base rate.”
First-time buyers typically borrowed £275,000 (£139,500 in the UK overall), up from £268,747 in the previous quarter. The average household income was £67,737 (£41,009 in the UK overall), up from £66,961 three months earlier. The typical income multiple in London of 4.06 (up from 4.02 in the previous quarter) was higher than the UK average of 3.61.
The average home mover borrowed £353,995 in the third quarter (£180,995 in the UK overall), up from £353,499 in the preceding three months. The average household income of a home mover was £91,940 (£55,865 in the UK overall), up from £91,329. This meant that the typical home owner income multiple in London was 4.01, the same as in the preceding quarter and higher than the UK average of 3.39.