With low interest rates from lenders remortgage buyers in London are locking competitive deals to reduce monthly repayment costs.
The number of remortgage buyers in London was 15,000 in the fourth quarter, the highest level for a decade according to UK Finance as mortgage rates remain at low levels.
Remortgaging in London has increased by 2.7% compared to the same quarter a year earlier and is 18.1% higher than in 2015 when there were 12,700 remortgages in the same period.
The value of loans for the fourth quarter was £4.6 billion, slightly higher year-on-year and 22.6% higher than the same quarter in 2015 with a value of £3.75 billion.
In 2018 there were a total of 60,400 new homeowner remortgages up 6.2% in 2017 and the highest annual number in London since 2008 when this figure stood at 111,900.
Lower mortgage rates benefit buy-to-let investors as they can remortgage to reduce the cost of interest repayments to lenders.
Strong increase in new homeowners
There was a strong rise in the number of first time buyers in London to 11,000 for the quarter increasing 5.8% compared to the same period in 2017.
Lending was up 7.4% year-on-year to £3.2 billion and in 2018 there were 42,800 new first-time buyer mortgages higher by 2.6% on the previous year.
Jackie Bennett Director of Mortgages at UK Finance said, first time buyer numbers increased for the third year running in 2018, despite a sluggish first quarter.
However, affordability remains a challenge for many potential buyers in the capital, underlining the importance of schemes such as Help to Buy, says Ms Bennett.
The average mortgage loan in London for first time buyers is £273,249 which is 4.05 household incomes and slightly down on the fourth quarter last year.
New buyers are aged 32 years purchasing a property averaging £368,757 with a deposit of £95,508 and with loan to values (LTV) of 74.1%.
Fewer people moving home
There are fewer numbers home mover mortgages in the fourth quarter of 2018 down 1.3% to 7,400 although the value of loans increased to £3.1 billion or 3.3% more year-on-year.
In terms of affordability in London, average mortgages for home movers was £351,499 with income multiples of 3.99.
The average age when homeowners move was 38 years, buying a property with a value of £519,968 and loan to value of 67.6%.
Jackie Bennett said, remortgaging in London reached its highest level in a decade last year, as customers locked into competitive deals and a large number of fixed rate loans came to an end.
For older homeowners in London there is significantly higher activity with equity release buyers accessing wealth in their property with a lifetime mortgage to help maintain their standard of living or pay university fees for grandchildren.
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 improve your quality of life, home improvements or gift to a family member or friend.
Learn more by using the equity release calculator, mortgage cost calculators, and property value tracker chart. Start with a free mortgage quote or call us and we can take your details.
