04/07/2017 • news

South London named UK’s hotspot for new mortgage lending

More new mortgage lending was approved in south London than the whole of Wales last year.

Around £8bn was lent to SE and SW postcodes in 2016/17, in contrast to £6.8bn in Wales and £8.2bn in Scotland, according to figures obtained from the Financial Conduct Authority (FCA) by peer-to-peer lender Lendy.

The top boroughs for new mortgage lending were Wandsworth (SW18) and Wimbledon (SW19), where property owners borrowed £472m and £408m respectively. London dominated the league table in terms of value of new mortgage lending, with 17 of the biggest 20 borrowers taken by boroughs in the capital.

The top region outside of London was Maidenhead, in Berkshire. It made eleventh place out of the 2,717 postcodes in the study with £301m borrowed in new mortgages.

Liam Brooke, co-founder of Lendy, said: “House prices in areas like Wimbledon and Wandsworth have continued to climb sharply, even through Brexit. Lenders view them as a safe bet, and continue to commit billions of pounds in new lending to them.”

Londoners borrowed a total of £17bn in new mortgages last year, as house prices continued to climb in the capital despite a marked slowdown nationally.

Despite sales numbers falling by 41% in the year to Q1 2017 and by 21% on Q4 2016, prices in prime central London rose by 4.6% over the quarter to an average of £1.9m. This was driven by a greater proportion of more expensive properties being sold, with an 8.5% annual increase in transactions between £2m and £5m, according to Land Registry figures analysed by specialist residential property adviser London Central Portfolio.

In contrast, greater London saw quarterly price growth of 1.2%, while average price growth across England and Wales was 0.29%.

Naomi Heaton, CEO of LCP, said: “The increase in average prices is likely to reflect a greater proportion of higher value properties being sold, rather than any real underlying price growth. This can, in part, be attributed to international homebuyers taking advantage of significant price discounts offered on top-end properties and beneficial currency exchange rates.”