The number of home movers in London has fallen to its lowest level in 25 years, new research shows.
According to the Council of Mortgage Lenders, home movers took out 32,400 loans last year – a 10% drop on 2015 and the lowest number since 1991.
Home movers borrowed a total of £12.5 billion, down 8% for the quarter and 21% compared to 2015.
First-time buyer borrowing went up 3% to £11.9 billion, but the number of loans taken out dropped 5% to 43,300.
Remortgage activity jumped 21% to £16.5billion last year, with the overall number of loans taken out rising 13% to 55,000.
Paul Smee, CML director general, said: “The number of home buyers in London fell to a four year low in 2016. Home mover activity in particular continues a downward trend, with the fewest loans since 1991. Persisting supply and affordability issues appear to be exerting an ongoing restraint on growth, meaning there is some uncertainty around how the market will perform going into 2017.
“By contrast, remortgage activity appears to be experiencing a resurgence. Competitive mortgage rates aided by low interest rates have sparked remortgage levels not seen in the capital since 2008.”
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: “The findings are interesting because they show that although activity fell in the last quarter in the run up to Christmas, overall for the year there was little change, reflecting the surge in activity as purchasers rushed to beat the stamp duty deadline.
“However, looking forward we are still seeing some concern on the high street as buyers and sellers try to negotiate on price in a continuing relatively uncertain market. Encouragingly, many regard this market as an opportunity to trade property in a more realistic climate.
“The fact that the proportion borrowed by first-time buyers is falling is encouraging, perhaps showing a more level playing field with investors but also probably includes quite hefty deposits from the Bank of Mum and Dad.’
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Remortgaging numbers are exceptionally strong, a result of just how cheap mortgage rates have become rather than any real concern that interest rates are going to start rising anytime soon.
“However, there is uncertainty with regard to Brexit and what that means for our economy, so we are finding borrowers keen to get some security in their own lives, usually by fixing their mortgage payments.”
