Property values in London are up by over 12% leading the UK which has seen mortgage lending 4% higher in March and 37% higher for the quarter.
Data from the Council of Mortgage Lending (CML) has shown that mortgage lending is 37% higher for the quarter when compared to the same period a year ago rising 4% in March compared to the previous month.
First time buyers and remortgage buyers borrowed £15.4 billion during March which was slightly up on £14.7 billion for February.
For the first quarter mortgages from lenders amounted to £46.3 billion or 10% lower than the previous quarter. However, this figure remains 37% higher than the same period in 2013.
London house prices leading market
House prices in London were up by 12.4% for the year to March and average price of £414,490 according to the Land Registry.
London is still leading the rest of the UK with an average rise of 5.6% with the price of a home now at £169,124. This was the largest year on year rise for UK property prices since August 2010.
For new purchases higher property values for buy-to-let landlords would require a larger deposit and mortgage to buy and higher rental income to cover the interest costs.
Based on data from HM Revenue and Customs (HMRC) there were 94,080 property transactions in the UK in March, 19% higher the same period a year ago. Although the first quarter is generally a slow period of the year, sales were the highest since the beginning of 2008.
Changes to mortgage rules
Tougher mortgage rules introduced by the Mortgage Market Review (MMR) are likely to make it harder for people to secure a mortgage such as first time buyers, home movers and switching remortgage buyers.
Mortgage lenders must now assess affordability for all applications taking into account ill how you spend your income on household costs and luxuries such as eating out, childcare, mobile phone, holidays and many others.
Lenders will also apply a “stress test” to ensure the borrowers can afford the payments even when interest rates rise in the future.
In contrast equity release buyers can secure fixed rate lifetime mortgages without affordability tests or evidence of earnings, which is important for borrowers with only pension income.
What are your next steps?
Call our LCM mortgage brokers if you are a buy-to-let landlord with a property, remortgaging and want the best mortgage deal, buying your first home or you are planning to move home.
For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your home to spend on anything such as home and garden improvements or even buy a more expensive home.
Start with a free mortgage quote or call us and we can take your details. Learn more by using the mortgage cost calculators, property value tracker chart and equity release calculator.
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