Mortgage lending figures in January were positive, particularly for those buyers with small deposits, typically first time buyers, according to the latest data to be published in the sector.
Some 66,350 mortgages approved in January 2019, according to the mortgage monitor report from chartered surveyors e.surv.
The firm pointed out that usually the number of mortgages approved in January is often lower than in a typical month, but approvals increased 4% between December and January. However, compared to January 2018, approvals were down 1.8%.
Despite mixed predictions for the housing market this year, there were encouraging signs for younger borrowers as 27.1% of all mortgage approvals were to borrowers with a small deposit in January.
This represents a strong improvement on December’s market position, when the number of approvals to these borrowers was 25.2%, according to Richard Sexton, director at e.surv.
‘There are many predictions for the housing and mortgage markets in 2019, ranging from the bullish to the more cautious. But the data for January shows that the market has started the year in reasonable health, with approvals rising compared to December 2018,’ he said.
‘Hard pressed first time buyers will be pleased to see a swing towards borrowers with small deposits this month. If this pattern continues across the year, it will be a welcome relief to those struggling to get a foot onto the housing ladder,’ he added.
There was a swing in the market from large deposit borrowers to those with smaller deposits during January. The proportion of loans approved for borrowers with a large deposit or amount of equity fell from 30.1% to 28.1% month on month.
These changes in the market meant very little change for the mid-market borrowers. The market share of these borrowers was almost flat, moving from 44.7% to 44.8%. On an absolute basis, the number of small deposit borrowers grew from 16,730 in December 2018 to 17,981 in January 2019.
‘First time buyers are becoming the new battleground for mortgage lenders. Rates are being cut and, perhaps more importantly, lenders are receptive to applicants that previously may have found accessing finance challenging,’ Sexton explained.
Yorkshire started the year as the region most receptive to first-time buyers and others with small deposits. Some 36.7% of all loans in the region were to this group of borrowers, higher than any other region surveyed.
Close behind was the North West, where 32.8% of loans went to this segment of the market and then Northern Ireland, where that rate was 32.7%. At the other end of the scale, just 17.3% of London borrowers were able to get on the ladder with a small deposit, the lowest of any region recorded in January.
Large deposit borrowers, by contrast, had a much better time of it in England, accounting for 38.5% of all sales. London was followed by the South East, where 33.5% of all loans were to this part of the market. In Scotland, Eastern England, and the South and South Wales regions, this ratio was 29.3%.
The North West, Northern Ireland, the Midlands and Yorkshire were the four regions which saw a higher proportion of mortgages go to small deposit borrowers than their large deposit counterparts.
