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Private Finance: London ranks top for mortgage lending value

Jessica Bird

October 24, 2020

The south west, south east and east of London rank first, second and third for the highest value mortgage lending in the UK, according to data from mortgage broker Private Finance.

These areas of London had a total of £38.3bn, £28.1bn and £23.8bn of mortgage lending respectively the year to 31 March.

Private Finance noted that the high levels of mortgage lending are, in part, the result of areas in south east London, such as Peckham and Bermondsey, experiencing rapidly growing interest among young professionals.

Elevated mortgage lending is also highly concentrated in London due to property prices being much higher in the capital compared to other parts of the UK.

However, the research suggested that the pandemic may trigger a movement of homeowners out of London in future.

Longer-term trends highlighted that towns on the periphery of London were rising in popularity  before the onset of the pandemic, with some of these areas experiencing the highest rises in the value of mortgage lending over the last year.

These include: St. Albans, rising 10.9% to £7.9bn in 2020, up from £7.1bn in 2019; Cambridge, increasing 10.8% to £8.3bn in 2020 from £7.6bn in 2019; and Oxford, jumping 10.5% to £13.2bn in 2020 from £11.9bn in 2019.

Shaun Church, director at Private Finance, said: “This data reveals that London continues to remain the most attractive area for homeowners.

“The transformation of Peckham and Bermondsey has contributed to an inflow of young professionals into SE London.

“High house prices and long-term demand for property in places such as Clapham have continued to support SW London’s mortgage market.

“However, shifting housing needs caused by people staying within the same four walls during long lockdown periods could cause a flight of homeowners from the capital.

“Workers are increasingly viewing being close to their physical workplace as less important due to widespread adoption of working from home practices.

“Fears over contracting coronavirus is putting downward pressure on demand for properties in highly populated areas.

“Rock-bottom mortgage rates may be incentivising people who have long considered relocating from cities to bring forward property purchases in the countryside to lock into cheaper mortgages.

“These factors are likely to compound and result in future activity being highly concentrated in areas just outside the UK’s major cities and the countryside.

“The top areas likely to experience the sharpest uptick in buyer activity and therefore mortgage lending could include Chelmsford, Chester and Reading.”


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