48% More Buyers are Obtaining Mortgages
In the last three months, West End specialist estate agency, LDG, has seen a 48% increase in buyers using mortgages to finance their purchases.
In the first quarter of 2011, 73% of LDG’s buyers paid cash for their properties, but this has now dropped dramatically to just 25%.
Ben Everest, a partner at LDG, comments:
“This huge swing in how property purchases are financed is very interesting and there could be a number of reasons for the shift.”
“For example, buyers who have large cash deposits may be opting to lock in to fixed rate finance deals while interest rates are still low; it was announced today (7th July) that rates will remain at 0.5%, but it is anticipated that they will rise later in the year.”
“Whilst mortgage availability is still a big problem at the lower end of the market, those who have large deposits are able to access favourable repayment rates and so the predicted capital appreciation which London properties can expect to achieve in the long term can eradicate the costs of borrowing, leaving buyers with more cash capital to use for other ventures which can give them a good return on their money.”
“The property market in the West End is very consistent at the moment; as anticipated, the spring market saw an increase in transaction volumes.”
“For both the first and second quarters of this year, around 60% of our buyers have been purchasing main family homes, and just under 20% have purchased for investment purposes.”
“These trends correlate closely with the first half of 2010, and I expect the consistency to remain as we move into the third quarter of 2011.”
“Similarly, the nationalities of our buyers continue to reflect those which we experienced last year; around 60% are from the UK, 20% are from countries within the EU, and a final 20% are from the rest of the world.”
“The London property market continues to attract foreign buyers as it is viewed as a ‘safe haven’ for investment and the weak pound means that buyers from Europe and the Middle East can benefit from exchange rates.”