First-time buyer activity saw similar trends with an increase in levels on the first quarter of the year, but down on the same quarter last year.
Home movers also had the same trend as first-time buyers in both volume and value.
And unlike house purchase activity, remortgage lending had quarter-on-quarter and year-on-year growth in both volume and value.
Paul Smee, director general of the CML, said: “As in the UK overall, the London market came out of the usual seasonal dip in the first few months of the year and saw increased activity; but volumes are still on the same period last year. Remortgage activity has shown quarterly and year-on-year growth after a period of stagnation. Borrowers appear to be taking advantage of competitive mortgage rates, ahead of a potential future interest rate rise.”
House purchase lending in London saw a quarter-on-quarter rise, in both the number of loans and the amount borrowed, compared to the first quarter of 2015. Despite this, there were fewer borrowers in London than in the same period in each of the two preceding years.
House purchase lending this quarter was driven mostly by first-time buyers, who made up 57% of all house purchase activity.
Remortgage lending also saw a rise year-on-year and quarter-on-quarter in amount borrowed and in number of loans.
First-time buyers in London typically borrowed 3.81 times their gross household income, down from 3.83 the previous quarter but more than the UK average of 3.38.
The typical loan size for first-time buyers was £224,994 in the second quarter, up 5% on the first quarter and 6% on the same quarter last year. The typical gross income of a first-time buyer household was £58,685, up 5% compared to the first quarter and 6% up on the second quarter of 2014.
First-time buyers' payment burden in the second quarter was 19.4% of gross income being spent to cover capital and interest payments, down on the first quarter's 20.3% but higher than the 18.4% UK average.
Home movers in London typically borrowed 3.75 times their gross household income, up from 3.69 the previous quarter and higher than the UK average of 3.08.
The typical loan size for home movers was £300,999, the first time average new loans have breached the £300,000 mark. The figure was up 3% on the previous quarter and substantially higher than the £160,994 UK average. The typical gross income of a home movers' household was £83,765, up 2% on the first quarter and 1% on the second quarter 2014.
Home movers' payment burden in the second quarter saw them spend 19.3% of their gross household income to cover capital and interest payments, down from 20.1% in the first quarter but higher than the 18% UK average.
Stephen Smith, director, Legal & General Mortgage Club & Housing, said: “Today’s figures show that the imbalance between supply and demand is not consistent across the country. House purchase loans in London in particular are significantly down on last year, where high asking prices have resulted in less activity in the market as fewer people are able to afford to make the property moves they want.
“House price inflation hotspots could end up pricing large groups of people out of some locations altogether, forcing them to move away from their family, friends and current employment in order to achieve their objective of homeownership. This is not good for communities or for families. If people are to live in their desired area of the country, more houses need to be built to accommodate those looking to buy.”
