Greater London sees fall in home lending in first quarter of the year

There was a decline in in house purchase lending in Greater London in the first quarter of 2015 but increased remortgage activity, according to the latest regional data from the Council of Mortgage Lenders.

First time buyers in Greater London borrowed £2.4 billion representing 10,100 loans, down by 16% in value and down 16% in number of loans compared to the last quarter of 2014. Compared to the first quarter of 2014, the total number of loans was down 14% and the amount borrowed decreased by 11%.

Home movers saw a decrease in numbers to 7,200 loans advanced in the period, valued at £2.5 billion, which was down 18% by volume and down 15% by value on the previous quarter. Year on year comparisons show a decrease of 18% by volume and down 11% by value.

Remortgage lending increased totalling 10,800 loans at £2.9 billion, which was up 10% by volume and up 13% by value. Compared to the first quarter of 2014, remortgage lending in London was up 2% by volume and 8% by value.

According to Peter Rollings, chief executive officer of Marsh & Parsons, the lending market has calmed down from the heady heights of 2014 and the general election earlier this month also had an impact.

‘But cheaper mortgage rates are now making waves in the market, and with the wealth of products now available, we can expect this to ripple out into a stronger summer of lending,’ he said.

He believes that the election result means political certainty and that along with a greater choice of homes on the market, and incentives like reduced stamp duty and Help to Buy support schemes at the lower rungs of the ladder will keep the market going.