Home buying in London rebounded in quarter 2 after a subdued beginning to the year as home buyers borrowed £6.1bn for house purchase, figures from UK Finance have revealed.
This represents an 11% quarter-on-quarter and 17% year-on-year increase with a total of 18,000 loans have been taken out.
First-time buyers borrowed £3.1bn, up 10% on the first quarter and 8% on the second quarter last year. This equated to 10,600 loans, up 5% quarter-on-quarter and 3% year-on-year.
Paul Smee, UK Finance head of mortgages, said: “Home buying in the capital bounced back from the traditionally subdued beginning of the year, with both first-time buyer and home mover lending showing growth both on the first quarter of 2017 and on the same period a year ago.
“The housing market in Greater London has some unique characteristics compared to the rest of the UK – more first-time buyers, but lower overall levels of home-ownership. Affordability and the supply of housing remain critical factors to manage for the London market if positive activity is to continue going forward.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, added: “On the face of it these figures are quite encouraging as although they are a little historic they cover the period leading up to the general election.
“But they are disappointing in terms of the volume of lending done to first-time buyers, who are extremely important for the health of the housing market and we would have expected to see a greater number of them. Other surveys have shown, and we have found in the high street, that first-time buyers are taking advantage of record low interest rates and less competition from landlords stunned by tax changes.
“However, it seems that first-timebuyers are probably more active outside London where they can find better value for money rather than in the capital where affordability pressures persist.”