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London First-Time Homebuyers Climb by a Third, Lending Rises

An Estate Agent Arranges a
An estate agent arranges a "Help to Buy" sign amongst a display of residential properties up for sale in London. Photographer: Simon Dawson/Bloomberg

The number of first-time London homebuyers climbed 33 percent in the fourth quarter compared with a year earlier as a recovering economy and government assistance boosted mortgage lending.

Home-loan borrowers rose to 13,400 in the British capital from 10,100 a year earlier, the Council of Mortgage Lenders said today in an e-mailed statement. Total U.K. mortgages increased by almost 50 percent in value to 3 billion pounds ($5 billion) compared with a year ago.

The financial crisis prompted a drop in first-time buyers as banks increased down payment requirements and raised barriers to lending. Now, Prime Minister David Cameron’s efforts to stimulate the economy through the housing market are bearing fruit, with buyers seeking almost 1 billion pounds of mortgages under the government’s Help to Buy program.

First-time buyers typically borrowed 198,900 pounds, a rise from 196,000 pounds a year earlier, according to the statement. They spent about 20.6 percent of their income on mortgage payments, less than the 21.3 percent spent a year earlier.

U.K. homebuilders are ramping up construction to satisfy rising demand. Persimmon Plc, the U.K.’s largest homebuilder, said yesterday that full-year profit rose 54 percent from a year earlier. Taylor Wimpey Plc, the third-largest homebuilder by market value, today said net income rose 19 percent in 2013 as home sales and prices climbed. Both beat analysts’ estimates.

For all of 2013, first-time buyers in London received 45,800 loans, up 24 percent from a year earlier, according to the statement. The total value of those loans was more than 10 billion pounds, up 34 percent from 2012.

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