Lendy: Large London mortgages may divert funding from new developments
LENDY has warned that eye-wateringly high house prices in London – and the large mortgages that accompany them – may result in less funding for new property developments.
The peer-to-peer property lender unveiled new research on Tuesday that showed St James’s in London is home to the highest average mortgage rate in the UK at £10.28m per year – more than 22 times the value of the highest average figure outside of London.
St James’s was followed by Belgravia at an average of £3.63m and Mayfair at £2.46m.
All of the top 10 postcodes for largest average mortgage size in the past year are in the capital, the study found, with London also home to the postcodes which saw the fastest growth in average mortgage size.
“Banks are potentially getting carried away with rising owner-occupied housing prices, leaving less money for new housing developments,” said Liam Booke, co-founder of Lendy.
“Banks continue to fund mortgages in property hotspots like London and the south-east as property prices are predicted to continue to rise over the long term. However, this does not address the housing gap by looking to lend to developers.
“Large amounts of lending for residential mortgages do not deal with the supply side of the housing crisis – outstanding lending to property developers is still close to record low levels.”
Lendy has channelled more than £325m to UK property developers since its fruition in 2012. It has almost 17,000 registered users on its platform who can enjoy annual returns of up to 12 per cent.