Loans to first time buyers in London at highest level since 2007

Lending to first time buyers in the capital is on the up Credit: Reuters

A new study shows that lending to first time buyers in thecapital is at its highest level in six years. There were 11,200 loans handedout in the second quarter of this year, a rise of almost 40% on the same timelast year.

The report from the Council for Mortgage Lenders shows that the amounts lent to first time buyers are also increasing, due to rising house prices. Affordability of houses in the capital is still tight, with buyers spending more of their income on their first mortgage than the rest of the UK. .

However, rising incomes have helped to cushion the blow - the percentage of monthly wages spent on mortage repayments has stayed at the same level since last year

The main facts from the report show:

  • Lending to first time buyers in London at its highest level since 2007, with £2,490m given out in the second quarter of 2013

  • 56% of house purchase loans in the capital went to first time buyers, compared to 46% across the UK overall

  • The typical loan for first time buyers has increased by £8700 to £192,000

  • First time buyers in London borrow an average of 3.7 times their income, compared to 3.3 times across the UK as a whole

  • Londoners spend an average of 21% of their income on mortgage payments, the same as in 2012