Average LTV at highest level for three years
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The average LTV is at its highest level for three years, breaking the 60% barrier for the first time since April 2008, shows e.surv’s mortgage monitor.
It now stands at 60.8%, a sixth consecutive monthly increase, and is up from 56.2% in March 2010.
Volumes increased in the 75% to 85% LTV bracket by twice the pace of the overall market since October last year, while the 85% to 90% bracket has grown by a third faster.
Mortgage approvals also rose sharply by 4.3% in March, rising from 46,967 in February to 48,979.
This is the third consecutive month of growth as the market recovers from a sluggish Christmas period. The year-on-year comparison is more positive too, with decline slowing to 0.6% compared to March 2010, the slowest year on year decline since it began falling in May 2010.
Purchase volumes increased markedly in the cheapest house price brackets, indicating that more first time buyers are getting a foot on the property ladder, with properties up to £125,000 accounting for a third of all approvals. The steady volumes in the most expensive price brackets continue to show that they remain more immune to the credit crunch and the availability of mortgage finance.
Richard Sexton, business development director of e.surv, says: “More people are getting higher LTV mortgage loans, and approvals on cheaper properties have increased, which is a sure indication that more first time buyers are finally getting onto the housing ladder.
“Rents have reached record levels and with higher LTV products available for the best borrowers, it’s no wonder more first-timers are grasping the nettle while rates are still cheap. Homeownership looks good value, especially if you fix your rate - more of them are realising this and getting onto the ladder.
“Yes, March is historically a cheery month for the market, but the brisk increase of approvals since January and the steady rise of LTV’s indicate that the effects of a stuttering economy on the mortgage market may have been overplayed.”
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