Borrowing by first-time buyers in London hits highest level for 10 years

Helen Cahill
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Political Uncertainty Dampens UK Housing Market
The Budget unveiled a stamp duty cut for first-time buyers (Source: Getty)

Mortgage borrowing by first-time buyers in London hit its highest level for 10 years in the third quarter, as more millennials managed to get onto the housing ladder.

Sky-high house prices in the capital have made it difficult for young Londoners to save for a property. In the third quarter, first-time buyers borrowed £3.31bn, up nine per cent year-on-year, according to figures released today by UK Finance.

Read more: Here's where first-time buyers will find the biggest stamp duty savings

The number of loans taken out by this group rose three per cent year-on-year to 11,200.

A typical first-time buyer borrowed £275,000 in London, as compared to the UK average of £139,000. The average household income for the quarter was £67,737, up from £66,961 in the prior three months.

June Deasy, UK Finance's head of mortgage policy, said: "Affordability remains challenging in London, but borrowing by first-time buyers grew strongly in the third quarter and reached its highest level for a decade.

"Borrowing by home movers grew even more strongly, but remained below its recent peak in the first quarter of 2016, when activity was boosted by the impending increase in stamp duty."

Millennials were at the centre of Philip Hammond's Budget yesterday, when he unveiled a stamp duty holiday for first-time buyers on purchases of up to £300,000.

To take into account the higher house prices in London, the chancellor said first-time buyers would also avoid stamp duty on the first £300,000 of purchases of up to £500,000.

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