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UK-wide fall in first-time buyer lending recorded in Q1

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  • 25/05/2016
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UK-wide fall in first-time buyer lending recorded in Q1
Lending to first-time buyers dropped in quarter one across the UK, compared to the previous three months, with Scotland suffering the biggest decline as the value of fledgling loans fell 24%.

Scottish first-time buyers borrowed £600m in Q1, around a quarter less than final quarter of 2015, Council of Mortgage Lenders (CML) figures revealed.

This decline was closely followed by first-time buyer lending in Wales which dropped by 20% quarter-on-quarter to £330m. Northern Ireland and London also saw a fall in lending to first-time buyers with declines of 16% to £160m and 7% to £2.9bn, respectively.

Year-on-year, lending values rose, with Wales seeing a 22% uplift in first-time buyer borrowing. This was followed by London, Northern Ireland and lastly Scotland with yearly increases in Q1 of 19%, 16% and 10%, respectively.

The average first-time buyer loan in London increased, quarter-on-quarter, to £248,047 from £243,746, which compares to the UK average of £130,500. The slight increase in the average London first-timer mortgage was offset by a rise in the total household income of borrowers to £62,508 from £61,155, meaning income multiples remained virtually unchanged from 3.94 to 3.93.

The average household income outside of London stood at £40,000 in quarter one.

Paul Smee, director general of the CML, said: “The usual seasonal dip in lending in the first quarter of the year didn’t seem to impact London as strongly as the UK overall, mainly due to a strong uptick in homemover activity.

“The housing market in greater London has some unique characteristics compared to the rest of the UK – more first-time buyers, but lower overall levels of home-ownership. Affordability and the supply of housing remain critical factors for the London market, and we will be pleased to work with the new mayor and his deputy on how to deliver appropriate strategy over his term of office.”

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