New CML data on the characteristics of lending in Greater London in the fourth quarter of 2014 show a decline in the level of house purchase and remortgage lending both year-on-year and quarter-on-quarter.

CML Gross Mortgage Lending

New CML data on the characteristics of lending in Greater London in the fourth quarter of 2014 show a decline in the level of house purchase and remortgage lending both year-on-year and quarter-on-quarter.

Quarterly highlights

  • First-time buyers in Greater London borrowed £2.9bn representing 12,000 loans. This was down compared to the third quarter by 11% in value and down 7% in number of loans. Compared to the fourth quarter of 2013, the total number of loans was down 10% and the amount borrowed decreased by 4%.
  • Home movers saw a decrease in numbers to 8,800 loans, valued at £2.9bn, which was down 15% by volume and down 20% by value compared to the third quarter. Compared to the fourth quarter of 2013, there was a decrease of 15% by volume and down 9% by value.
  • Remortgage lending declined in the fourth quarter totalling 9,800 loans (£2.5bn), which was down 12% by volume and down 13% by value. Compared to the fourth quarter of 2013, remortgage lending in London was down 13% by volume and 11% by value.

Annual highlights

  • Lending in Greater London accounted for 21.5% of UK house purchase activity, down from 22.6% in 2013.
  • First-time buyers in London were advanced 48,800 loans representing £11.8bn in 2014. This was up 7% by volume compared to 2013, and 18% up by value.
  • Home movers in London were advanced 37,000 loans, which was down 1% on 2013. These loans totalled £12.5bn, which was up 10%.
  • Remortgage lending in London came to 42,400 loans in 2014 representing £11bn. This was 1% up by volume compared to 2013, and 10% up by value.

Paul Smee, director general of the CML, commented:

“London is a unique market, with equally unique conditions and challenges, which will need a focus on all types of housing tenure going forward. 2014 had the highest annual level of borrowers buying a home in London since 2007, with first-time buyers leading that growth, but there have been recent signs of the market cooling.

“The dip in the last quarter of the year may suggests that affordability pressures do still persist in the Capital. Alongside a general steadying of lending across the UK, this may lead to slightly more subdued activity in 2015.”