Home-owner house purchase in Greater London decreased in the final quarter of 2014 to 20,800 loans, which was down 10% compared to the third quarter and 12% down compared to the fourth quarter of 2013. These loans by value was £5.8bn, down 16% compared to the third quarter and down 6% on the fourth quarter 2013.
Overall in 2014, the total number of loans advanced for home-owner house purchase was 85,800, which was up 3% compared to 2013. These loans came to £24.3bn, an increase of 13% compared to 2013.
First-time buyer affordability changed slightly in Greater London quarter-on-quarter with first-time buyers typically borrowing 3.84 times their gross income, less than the 3.86 income multiple in the third quarter but more than the UK average of 3.38.
The typical loan size for first-time buyers was £216,000 in the fourth quarter, down from £222,275 in the previous quarter. The typical gross income of a first-time buyer household was £56,314 compared to £58,000 in the third quarter.
First-time buyers' payment burden remaining relatively low in the fourth quarter at 20.8% of gross income being spent to cover capital and interest payments, lower than the third quarter's 21.0%.
Home mover affordability changed fractionally, with home movers typically borrowing 3.64 times their gross income compared 3.69 in the third quarter and to 3.03 for the UK overall.
The typical loan size for home movers was £276,355 in fourth quarter, up from £289,999 in the previous quarter. The typical gross household income of a home mover was £80,160 in fourth quarter compared to £83,592 in the third quarter.
Home movers' payment burden in London was on average 20.5% of gross income being spent to cover monthly capital and interest payments, less than the 20.9% in the third quarter but more than the 18.8% UK average.
Remortgage lending declined in the fourth quarter to 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.
Remortgage lending in London increased to 42,400 loans in 2014 totalling £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."
