First Time Buyers Borrow More
According to data produced by the Council of Mortgage Lenders (CML), there was an increase in the amount borrowed by first time buyers in the second quarter of 2016 by way of residential mortgages. Potentially, this could be good news for the housing market although the figures are pre-Brexit so it will be interesting to see the data for the third quarter of this year.
Between 1st April and 30th June 2016, it was interesting to see that first time buyers borrowed an extra 3% in comparison to the first three months of this year. Lending to this important sector of the market amounted to £3 billion in Q2 of 2016. When compared with the same period last year it is interesting to see that borrowing levels rose by 10%. The number of loans totalled 10,800 in Q2 of 2016 that was an increase of 3% when compared with Q1 of this year but was a reduction of 1% in comparison to the same three-month period last year.
It is interesting to read that the average amount borrowed by first time buyers in Greater London rose from £249,700 in Q1 of 2016 to £258,400 in Q2 of 2016. The average amount advanced across the UK in the second quarter of this year was £130,500 so you can see that first time buyers are having to borrow an awful lot more to get on the home ownership property ladder in London which is, of course, not a surprise.
In London, first time buyers borrowed an average of 75.2% of the value of a property in the second quarter of 2016 which was a slight increase when compared with the previous quarter when the loan to value figure was 75%. First time buyers in London are having to borrow more against their income with the income multiplier being 3.98 in Q2 of 2016 whereas in Q1 of 2016 it was 3.93 and in Q2 of 2015 it was 3.82.
We trust that you have found the above to be informative.