Seems that mortgage lending in the capital is following a similar upward trend to the rest of Britain.
First-time buyers in the capital borrowed an average of £198,000 to back their purchase in the third quarter of 2013, up from £192,700 three months earlier, figures from the Council of Mortgage Lenders (CML) reveal.
Typically, would-be buyers borrowed 3.74 times their income in the quarter. In the same period of 2012, the amount first-time buyers took out from mortgage lenders was 3.59 times their income.
However, the growing incomes and the declining interest rate seen in the third quarter meant that the initial affordability of property loans was broadly intact, with buyers spending 20.8% of their income on covering their mortgages, or the same amount allocated for payments the previous quarter. In July-September 2012, first-time buyers in London earmarked 21.3% of their income for the purpose.
As many as 13,100 loans were provided to first-time buyers in the capital in the third quarter, a rise of 24% in quarterly terms and 32% more than in 2012. The figure suggests that the number of first-time buyers in the capital followed the trend observed in the rest of the country despite pressure stemming from rising property prices.
The share of new borrowers buying homes worth over £250,000 expanded to 53% in July-September from 47% last year, attracting duty at a rate of 3% on their purchase. The number of people paying less than £125,000 for their first home accounted for just 3% of the total, avoiding stamp duty completely. The homes bought by 11% of new borrowers had a price of over £500,000.
First-time buyers commanded a larger share of mortgage loans in London, at 55%, compared to the national average of 44%, continuing a long-term trend witnessed for many years. The CML explained this with the higher number of young people living in London.