Mortgage approvals crept up month on month in June, latest figures show
The mortgage market in the UK saw growth between May and June with mortgage approvals up 0.6% along with growth in the number of small deposit borrowers, the latest home lending market monitor report shows.
According to the report from chartered surveyors e.surv, low mortgage rates are also enticing existing home owners back to the market.
Overall, the mortgage market was buoyed by strong activity among first time buyers and those with smaller deposits, with the proportion of loans going to these types of borrowers increasing month on month to 27.9% from 27.7% the previous month.
Existing home owners, who have been responsible for much of the strong growth in the market so far this year, continued to come to market in June and this has worked to combat a lack of activity in the wider housing market, where fewer people have been making purchases in recent months, according to Richard Sexton, director at e.surv.
‘Summer can sometimes see a drop in or stall in activity, as would-be buyers take holidays and think less about their finances. Mortgage lenders have made a concerted effort to revamp their product ranges and launch new deals to help lure in borrowers,’ he said.
‘For existing home owners, there are now a wide range of remortgage products available which are designed to help them cut their repayments and get greater certainty about their future outgoings,’ he added.
Borrowers with large deposits continued to grow their market share and the number of mortgage approvals to this part of the market increased modestly to 24.7% from 24.5% in May.
‘We have seen an increase in the number of both small and large deposit borrowers and this is likely a result of more first time buyers getting on the ladder and also existing home owners with lots of equity choosing to remortgage,’ Sexton said.
Yorkshire was replaced as the best location for small deposit borrowers to purchase, with Northern Ireland seeing the largest share. Some 35.9% of all borrowers in Northern Ireland had small deposits, a figure which will include many first time buyers. This compared to 35.7% in Yorkshire. The North West at 34% was the other region which saw more than a third of its loans going to small deposit customers.
London was the area with the smallest proportion of these customers, at 17.4%. The capital had the highest proportion of large deposit buyers, with 33% of all borrowers from this category. This was ahead of other regions, including the South East, where 29.3% was recorded, and the South and South Wales at 24.9%.