The Number Of Mortgages For Home Buyers Falls 16% In A Year
Reports are showing further evidence of weakness in the London property market as details emerged that there has been a fall in lending to house buyers.
The Council for Mortgage Lenders has stated that there was 17 per cent fewer loans for house purchase in Greater London during the first quarter of the year, at 17,300, compared to the final quarter of 2014. Also the amount of completed mortgages was down by 16 per cent on the same period last year.
Also, loans totalled £4.9billion in the first quarter of the year, which is down 16 per cent compared to the fourth quarter last year and down 11 per cent on the first quarter of 2014.
Recently revealed figures also show an increase in wages- 2.2 per cent a year for regular wages versus a 0.1 per cent fall in the Consumer Price Index. Meaning that there is more money in the buyer’s pockets to make repayments and save for deposits. But the issue is that the average house price in the capital is much higher than it was a year ago, taking it out of the reach of buyers.
Combined with the tougher lending rules that were introduced in April of last year, we may see a fall in the number of buyers which is matched by a fall in sellers. The Mortgage Market Review is trying to better review the finances of the buyer, to ensure they could withstand repayments if the Bank of England’s base rate were to rise.