Rise in mortgage use to buy West End homes
Friday, 8 July 2011 11:51 AM
There has been a significant rise in the proportion of people using mortgages to buy property in London’s West End.
Specialist estate agent LDG said that in the last three months it had seen a 48 per cent increase in buyers using mortgages to finance their purchases.
In the first quarter of 2011, 73 per cent of LDG’s buyers paid cash for their properties, but this has now dropped dramatically to just 25 per cent.
Ben Everest, a partner at LDG, said: “Buyers who have large cash deposits may be opting to lock in to fixed-rate finance deals while interest rates are still low… 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."
Everest noted the increase in West End transaction volumes in the spring, and added that the breakdown of buyer nationalities has remained largely unchanged, with Brits accounting for 60 per cent of transactions, and a further 20 per cent coming from EU countries and 20 per cent from the rest of the world.
He added: “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.”
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