First-time buyers in London got the most home loans in more than five years in the latest sign of a boom in the city’s residential real estate market, according to a group representing U.K. mortgage lenders.
The 11,200 mortgages given to those buying their first home in the U.K. capital in the second quarter was a 38 percent increase from a year earlier and the most since the end of 2007, the Council of Mortgage Lenders said today in a statement. First-time buyers accounted for 56 percent of London home loans in the period compared with 46 percent in all of Britain.
“Mortgage lending in London has followed a similar pattern to the rest of the U.K. with strong house purchase activity this quarter, strengthened particularly by first-time buyer activity,” Paul Smee, director general of the CML, said in the statement. The rise in total lending “suggests increasing confidence that economic conditions are becoming more favorable.”
Chancellor of the Exchequer George Osborne has introduced measures to increase mortgage availability, helping revive the housing market. Record London house prices are leading first-time buyers to take on more debt and the average amount they borrowed rose 6.9 percent in the second quarter, according to data compiled by the CML.
Lenders granted 20,100 home loans worth 5.1 billion pounds ($7.9 billion) in London in the second quarter, a 20 percent increase from a year earlier, CML said. The group’s members account for about 95 percent of all residential loans in the U.K.