First-time buyers (FTBs) accounted for 11,200 loans for house purchase in London in the second quarter of 2013, the largest quarterly number since the end of 2007, according to new data from the Council of Mortgage Lenders and an increase of 19 per cent on the previous quarter.
Figures from the second quarter show that FTBs in London make up a larger proportion of house purchase loans compared to the UK overall. In the second quarter, 56 per cent of house purchase loans were to first-time buyers in London compared to 46 per cent in the UK overall.
Whilst first-time buyers took out larger loans (on average £192,600 compared to £183,900 in the second quarter last year) the affordability was almost unchanged thanks to higher incomes and falling interest rates.
This meant on average FTBs spent 20.8 per cent of their income on mortgage payments almost unchanged from 21 per cent in the first quarter of 2013.
Affordability in London does however remain tighter than in the UK overall with first-time buyers borrowing an average of 3.67 times their income compared to 3.30 for the UK overall in the second quarter.
This may be why first-time buyers in London are generally putting down larger deposits than in the rest of the UK. The average loan to value remains at 75 per cent in London compared to 80 per cent for the rest of the UK.
In addition, incomes of first-time buyers in London are higher than in the rest of the UK- on average £52,100 per annum compared to £35,400 in the UK overall.
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