Mortgage debt in central London now exceeds that of Wales and the rest of the capital is now seeing faster house price rises.
The Council of Mortgage Lenders (CML) latest data shows that homeowners in the south-west of London including Chelsea, Balham and Fulham have mortgage debt of £29.4 billion, more than the whole of Wales with £28.6 billion.
Averages prices also differ significantly where homes average £140,000 in Wales and £365,000 in London.
Higher property values in London makes it harder for buy-to-let investors to make a new purchase as they would require a larger deposit and higher yields to cover the interest costs.
Prices stronger in suburbs
Central London prices are beginning to slow with rises of 8.9% for the year to March with the average prices of £4.2 million.
These prime city properties often costing in excess of £10 million such as Kensington, Chelsea, Knightsbridge, Mayfair and Belgravia have benefited from international buyers.
Domestic homeowners have bought further out in Fulham and Hammersmith allowing a gradual movement of families buyers outwards. In these greater London locations property prices are now rising at 13.1%.
The rise in London house prices allows the older equity release mortgage buyer to accessing the wealth in their property to consolidate debt or gift to a family member or friend.
More London areas benefiting
More areas in London are on the rise such as properties in south to south west of the capital in Wimbledon, Richmond, Chiswick as well as Battersea and Wandsworth are rising 14.7%. To the north Islington up 15.8%, Marylebone higher by 19.3% and Wapping rising by 21%.
The continued rise in the cost of a home means first time buyers and home movers would require a higher deposit, larger mortgage or higher earnings to buy.
The highest average prices are north west London at £3.1 million with south west London at £1.9 million followed by prime north London with £1.5 million and £775,000 for properties east of the city.
One advantage of rising house prices for homeowners is remortgage buyers can now release capital for home improvements.
What are your next steps?
Talk to our London City Mortgage brokers for advice if you remortgage your existing home and want the best mortgage deal or release capital, buying your first home, moving home or are a buy-to-let investor.
For older homeowners releasing equity from your property, our LCM mortgage advisers can recommend the lifetime mortgage, accessing wealth to maintain your lifestyle, repay an interest only mortgage or reduce inheritance tax owed by your beneficiaries.
Learn more by using the equity release calculator, mortgage monthly cost calculators, and property value tracker chart. Start with a free mortgage quote or call us and we can take your details.
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