April showed a sharp upturn in mortgage approvals according to residential chartered surveyors e.surv’s Mortgage Monitor as borrowers take advantage of low mortgage rates across the market.
There was a 2.7% rise compared to the previous March and a significant increase of 5.5% compared to the previous month. In total 65,781 mortgages were approved in April 2019.
Small deposits and first time buyers
First time buyers and buyers with small deposits showed the greatest increase in successful mortgage applications, representing 28.5% of all buyers.
This was an increase of 2.5%, or a rise from 17,205 to 18,748 compared to March. It demonstrates lenders’ increasing interest in first time buyers as other parts of the market, particularly buy to let, slow down.
As may be expected, those with average deposits made up the majority of the market, although this sector experienced a slight fall from 47.8% to 47.2% month-on-month.
Lending to buyers with larger deposits fell in April, with less than a quarter, or 24.3% of loans made to this section of the market. This is a substantial fall on March, where 26.2% of loans were made to these buyers, and even more so compared to January, where large deposit holders represented 28.1% in January.
It was in Yorkshire where first time buyers and those with small deposits fared best. Over a third, or 36.6% of approvals were in this market. Yorkshire has been the most favourable region since the start of the year.
This is closely followed by the North West, where 35.1% went to such buyers, and the Midlands, which saw 31.8% of all approvals.
In London and the South East the story was very different, with large deposit borrowers dominating the market. Just 18.9% of all loans were made to first time buyers or those with small deposits in London. This is in comparison to 33% of those with larger deposits.
The South East followed with 28.1% of lending going to this market sector, and the South and South Wales each on 25.5%.
Richard Sexton, director at e.surv, said: ‘In many parts of London and the South East, the property market continues to move slowly. Yet this has not translated into the mortgage market with activity remaining strong.
‘There has been a healthy increase in the proportion of loans going to first-time buyers, showing that lenders are welcoming these customers with open arms.
‘Previously it may have been difficult for these borrowers to get their foot on the ladder, but lenders are now reaching out to these parts of the market.’
Sexton added: ‘Large deposit borrowers once held an tight grip on the mortgage market but that has loosened in recent times.
‘Yet the low rates available mean that there are still many current homeowners coming to the market for new loans.’