The number of mortgages approved in the UK in November was flat compared to the previous month, but a competitive remortgage and first-time buyer market meant activity was actually up compared to the same point a year ago.
There were 67,109 mortgages approved during the month, marginally higher than October’s figure, when 67,011 approvals were recorded, according to the latest Mortgage Monitor from chartered surveyors e.surv.
Compared to November 2017 there was a healthy increase in activity, with approvals up 4% year on year and the report points out that low rates offered by mortgage lenders continue to represent good value for those with an appetite to commit to remortgaging.
But in addition to these remortgages, first time buyers have continued to increase their market share. In November 25.9% of all loans went to borrowers with a small deposit, higher than the 24.6% recorded in October and the 24.2% recorded in September.
The latest approval figures suggest that cheap mortgages are attracting a consistent level of borrowers into the market, regardless of the weather. However, in December mortgage lenders often look to secure their annual targets, sometimes resulting in keenly-priced deals on offer at the end of the year. We have already seen a number of cheap first time buyer deals launch in recent weeks, and other lenders could follow suit,’ said Richard Sexton, e.surv director.
Large deposit borrowers accounted for 28.9% of the market in November, lower than the 29.6% recorded a month ago. Despite this fall, the proportion of loans to midmarket borrowers dropped back month on month, largely due to the rise in loans to small deposit customers.
Some 45.2% of all loans went to mid-market borrowers in November, lower than 45.8% recorded in October. On an absolute basis, the number of small deposit borrowers grew rapidly from 16,485 to 17,381.
Sexton pointed out that the market has continued to shift towards those first time buyers and others with smaller deposits, and away from those with large amounts of equity in their property. Indeed, almost 1,000 additional small deposit buyers achieved their dream of home ownership this month compared to October.
Northern regions of England and Northern Ireland continued to be the most attractive for small deposit house hunters. In Yorkshire, 34.8% of loans were awarded to borrowers with smaller deposits, higher than any other region. This put the region ahead of the North West with 31% in November, and Northern Ireland with 29.2%.
Those three regions all recorded a higher proportion of small deposit borrowers than their large deposit counterparts this month while in the Midlands small deposits made up 28.5% of the region’s market.
At the other end of the scale, just 16.5% of borrowers in London were in this category. This put the capital ahead of the South East at 20.9%. London and the South East saw their respective markets dominated by large deposit borrowers who made up 38.2% of the market in London and 35% in the South East.
Yorkshire at 20.7%, the North West at 22.8% and the Midlands at 24.9% all saw fewer than a quarter of mortgage approvals go to this segment of the market. In Northern Ireland 27.8% of mortgages were to those with larger deposits.