Yorkshire is top spot for first time buyer mortgages in the UK

Yorkshire has emerged as a hotspot for first time buyers with the largest number of small deposit mortgages taken out in the region while London continues to be the toughest for those with smaller deposits.

The latest research show that buyers in London are still struggling to get on the housing ladder at a time when the number of mortgage approvals are rising across the UK, up 4.2% in March compared with the previous month.

But mortgage approvals are down compared with a year ago, the data from chartered surveyors e.surv shows, and with continued speculation that the Bank of England base rate will rise again in the next few months, the summer months could see strong activity as more home owners look to remortgage and secure a low rate.

Across England, Scotland, Wales and Northern Ireland some 19.6% of all mortgage approvals were to those with smaller deposits and while this figure is down on the 21.1% recorded in February it remains higher than the most recent low in the market.

Some 30.3% of all approvals in Yorkshire went to first time buyers and others with small deposits in March, followed by 29.4% in Northern Ireland and 26.9% in the North West of England. Yorkshire was the only region to have a greater proportion of small deposit borrowers than large deposit ones.

‘As talk of a further base rate increase continues to gather momentum, we are seeing many borrowers fix their rate and protect themselves against future rises. This has contributed to the growth in the mortgage market compared to the previous month. While the proportion of loans being given to first time buyers has declined month on month, this month’s data shows the overall market is in a much stronger position than at the end of 2017,’ said e.surv director Richard Sexton.

The number of mortgages approved for borrowers with a large deposit increased substantially month on month. These borrowers, defined by this survey as those with a deposit of 60% or more, made up 34.5% of the market in March 2018, the highest ratio seen so far this year.

At the same time, the proportion of mid-market borrowers has remained steady. In March 45.9% of all approvals were to these borrowers, in line with the 45.8% recorded in February.

London continues to be dominated by those with larger deposits as 41.2% of all loans went to those with big deposits compared to just 13% for small deposit borrowers. Scotland was the market with the second biggest disparity, with 39% of loans going to large deposit buyers versus 17.1% for their small deposit counterparts.

Other areas which had a high proportion of large deposit buyers were the South East at 38.6%, the South and South Wales at 36.5% and the East of England at 36.3%.

If you were a first time buyer with the ability to live and work anywhere, the Yorkshire market would be the first place to start your house hunting. It is the only market in the UK which is more dominated by small deposit buyers than those with large deposits of cash. This is in stark contrast to London, where just 13% of all mortgages go to those with small deposits, versus 41.2% to those with large deposits,’ Sexton added.