"While the findings serve as more of a reminder than a surprise about the headwinds facing buyers in the UK capital, what is clear is that buyers are showing more openness about who they can successfully pair up with on joint credit applications to access the finance they need"
- Craig Tebbutt - Equifax UK
Londoners are among the least likely to make a joint mortgage application with their partner, according to new research from Equifax UK, in signs of the affordability headwinds facing couples in the city and a preference to settle down outside of the capital.
Despite this, Londoners rank above the UK average on joint mortgage applications with parents (10% vs 7%), children (13% vs 6%), friends (13% vs 9%) and siblings (7% vs 5%) – showing an increased openness beyond traditional credit pairings to overcome the financial barriers of living in the capital.
When it comes to joint applications more widely, such as for car finance and overdrafts, Londoners are over a third more likely to take out credit with a partner (42% vs 31% UK average). However, for mortgages specifically, Londoners remain under-average, at 39% versus the 48% UK average.
Potential mortgage market recovery
Equifax UK bureau data hints at early signs of UK mortgage market recovery, with originations consistently increasing in recent months and mortgage arrears stabilising since the start of the year. Average repayments on new lending remain 51% higher than in January 2022, but the bulk of this growth occurred in 2022 itself.
However, recovery is coming at a cost. Since November 2023, on a monthly basis around 10% of mortgage originations are at loan terms of more than 35 years. This is a significant increase on the 3.5% observed two years prior, as consumers opt to manage affordability by stretching repayments for longer and incurring more interest on debt as a result.
Craig Tebbutt, Chief Strategy & Innovation Officer at Equifax UK, said: “House price to income ratios have widened and this is changing the credit landscape for prospective homebuyers. There are signs of interest rate cuts and recovery in the UK mortgage market, but affordability pressures will persist for some time and more consumers are extending property loan terms to help bridge the gap.
“While the findings serve as more of a reminder than a surprise about the headwinds facing buyers in the UK capital, what is clear is that buyers are showing more openness about who they can successfully pair up with on joint credit applications to access the finance they need.
"This is a welcome development for financial inclusion and our new shared credit score subscription can help more consumers understand their creditworthiness and plan for financial milestones.”
