(Bloomberg) -- The number of buyers using mortgages to purchase London homes fell by almost a fifth in the first quarter as high values and limited supply damped demand.
About 16,700 loans were advanced in the first quarter, a 19 percent decline from a year earlier, according to data published Wednesday by the Council of Mortgage Lenders. The homebuyers borrowed 5.4 billion pounds ($7 billion) in the period, a 22 percent drop.
A widening gap between home values and wages, coupled with tax increases and political uncertainty have contributed to a drop in demand for London housing. The number of sales agreed, homes offered for sale and new buyer enquiries all fell in April, according to a survey published May 11 by the Royal Institution of Chartered Surveyors.
The drop in demand “has been more pronounced in London compared to the U.K. overall as persisting supply and affordability issues continue exerting some restraint on growth,” Paul Smee, the director general at the CML, said in a statement.