Home buyers in London borrowed £5.5bn for home-owner house purchase, down 23% quarter-on-quarter and 3% on a year ago, according to the latest figures from the CML.
A total of 17,500 loans were taken out, down 17% on the previous quarter and 8% compared to the second quarter 2015.
Borrowing by first-time buyers amounted to £3.0bn, up 3% on the first quarter and 10% compared to the second quarter last year. This equated to 10,800 loans, up 3% quarter-on-quarter but down 1% year-on-year.
However borrowing by home movers was significantly down, £2.5bn, 41% lower than quarter one this year and 14% down compared to a year ago. This equated to 6,700 loans, down 37% quarter-on-quarter and 18% on quarter two 2015.
Remortgage activity totalled £4.3bn, up 6% on the first quarter 2016 and 29% compared to a year ago. This came to 14,200 loans, up 5% quarter-on-quarter and 19% compared to a year ago.
Paul Smee, director general of the CML, said: “First-time buyers have continued to drive mortgage lending in London, with 10% more first-time buyer lending in the second quarter than the first. The opposite is true for home movers, probably just reflecting a rebalancing after the very strong first quarter as many buyers sought to complete purchases before changes to stamp duty.
“The second quarter data largely pre-dates the EU referendum. While it will take time to see how Brexit may affect the market, the London mortgage market clearly remains active and firmly open for business.”
Quarter-on-quarter affordability metrics for first-time buyers show an increase in the typical amount borrowed, to £258,400 (£130,500 was the UK average) from £249,700.
There was a rise in the total household income of borrowers in London to £64,500 (£40,000 was the UK average) from £62,900. Overall, the median income multiple increased from 3.93 to 3.98.
Remortgage activity increased this quarter with the highest number of remortgage loans since the first quarter of 2009, and the highest value of remortgage lending in London since the last quarter of 2008.