Mortgage borrowing slump continues despite Scottish spike
Borrowing by first-time buyers in London fell 11% in the first three months of 2015 compared to the previous year, while the number of loans to first-time buyers in London fell by 14%.
According to new data from the Council of Mortgage Lenders (CML), first-time buyers in London borrowed £2.4 billion in the first quarter of the year, spread across 10,100 loans.
Home movers decreased in number by even more, down 18% year-on-year in terms of the number of people moving house and down 15% in terms of amount borrowed.
Wales, Scotland and Northern Ireland all witnessed declines in both the number of borrowers and total amount borrowed compared to the same period last year.
"The data shows that the slowing in the market that occurred in the latter half of 2014 would appear to have continued into early 2015," says David Hollingworth of London & Country Mortgages. "The beginning of 2014 was an extremely busy market so the fact that the market has calmed should not be so surprising.
"It will be interesting to see if the second quarter picks up now that the general election is out of the way and we enter what would traditionally be a busier period. We have certainly been busy as borrowers recognise the extremely competitive rates that are on offer."
Notably, Scotland showed a pronounced spike in loans to home movers, with the amount loaned to people moving house up 24% year-on-year at £1.1 billion and the number of people borrowing for that purpose up 5% at 6,700.
"Encouragingly the CML's data suggests a slight uptick in interest in remortgage and that is likely to continue, as more borrowers look to take advantage of low mortgage rates and save money," continues Hollingworth.
"It makes sense to lock in at a low [rate] and although a base rate rise may still be a way off the best rates will have already disappeared by the time a rate change does come.
"There is still some quite significant regional variance in behaviour even if general trends are the same. That's been a regular feature of the market and shows little sign of abating."
This article was written for our sister website Money Observer
Also referred to as the bank rate or the minimum lending rate, the Bank of England base rate is the lowest rate the Bank uses to discount bills of exchange. This affects consumers as it is used by mainstream lenders and banks as the basis for calculating interest rates on mortgages, loans and savings.