“If substantial lending is targeted at buy-to-let investors to snap up lower priced properties rather than helping to support the more needy market of potential first-time buyers, it shows that mortgage funds are available in this price bracket but are being denied to those who need them most,” said Miles Shipside, director of estate agency website Rightmove.
For those unable to get onto the housing ladder in London there is evidence of growing lender competition in the lower priced end of the market, but equity rich buyers are beating new buyers to the punch.
Lenders are looking for borrowers with larger deposits to help them build a more profitable, lower risk mortgage book, said Rightmove.
Meanwhile, the number of property sellers in London has jumped 21% pushing asking prices up 4.2% in just one month.
While the property market in the rest of the country is still frozen over by a lack of finance and equity growth hindering the ability to trade up, London sellers felt confident enough to raise prices by 4.2% between January and February.
An article in The Guardian suggests buyers are gearing up in readiness for bonus pay out season, which starts in February.
Shipside said: “The more elite markets in the UK have some immunity to the effects of stunted equity growth and the problem of accessing mortgage finance, and Londoners seem both ready and able to try to move up the housing ladder”.
The jump does follow a seasonal trend and last year prices jumped 4.8% in February because of similar pent up demand and the ability to pay more.
Shipside said: “Traditionally new sellers will try for a higher price in the more active spring window.”
