The London housing market may be suffering from a decline in house prices and homebuyer activity, but more homeowners are taking advantage of opportunities to secure a better mortgage deal.
Along with the rest of the UK, householders have been spurned on by the latest interest rate increase, and the number of London households renegotiating their home mortgage deals has reached a nine year high.
Analysis of Quarter 2 2018 data by the finance and banking trade association, UK Finance, has revealed that £4.84 billion was committed to remortgage business in London. A total of 15,200 mortgages were renegotiated, nearly 17% more than last year at an increase in value of over 23%.
First time mortgages
Established home owners are keeping the mortgage business busy, but first time buyer activity in London has slowed down.
Year on year, the 10,300 new mortgages taken out by London’s first time buyers was down 3.7%. The average first time mortgage of nearly £275,000 means that London’s average first time buyer now requires a gross household income £68,000, 1.8% more than a year ago.
While remortgages were significantly up, the 6,800 new mortgages taken out by home movers was down over 8% year on year.
The average London mortgage borrower now earns on average £92,000, and requires an average loan size of £355,000, representing an income multiple of 4.01. The multiplier hasn’t changed from a year ago, but the percentage of household gross income now needed to service the mortgage capital and interest repayments has risen slightly to 18.5% (from 18.4%).
Make sure you take independent advice from your local Royal Institution of Chartered Surveyors registered Chartered Surveyor when buying property. Our network of independent Chartered Surveyors can provide you with advice and a home survey, building survey or property valuation in London or elsewhere in England or Wales.