Activity in the mortgage market remained strong in May, despite the continued slowdown in the property market.
The latest Mortgage Monitor from e.surv shows there were 65,801 mortgages approved in May this year — a 1.2 per cent rise when compared to the same period last year.
However the figures show that May’s lending total did drop back slightly from last month’s figure, falling by 0.7 per cent month-on-month.
This growth is being driven by competitive deals, according to e.surv, which is encouraging existing homeowners to remortgage.
There has also been reasonable strong activity in the first time buyer market. The figures show that the proportion of loans given to first-time buyers and others with small deposits declined by 0.7 per cent from April to May.
However, 27.7 per cent of all mortgages now going to this group, which remains significantly ahead of the 26 per cent figure recorded in March.
The reflects the strong performance of the first-time buyer market, even when others are holding off making purchases.
In a regional breakdown of mortgage activity, Yorkshire remains the areas with the most favourable conditions for first-time buyers, and other with small deposits. In total 34.9 per cent of all loans went to this part of the market – higher than all other regions. Yorkshire has topped this particular chart since the start of the year, according to e.surv.
The nearest challenger was the North West, where 33.7 per cent of loans wen to this market. The only other region to record over 30 per cent was the Midlands, registering a total of 31.3 per cent.
Not surprisingly, London remains the most difficult market for these borrowers, with only just 17.5 per cent of loans in the capital going to this sector of the market.
E.surv director Richard Sexton says: “The doom and gloom in the property market seems a mile away from the positive stories coming out of the mortgage market.
“While few people are moving when they don’t have to, first-time buyers are still desperate to get onto the ladder. As for existing homeowners they are being tempted into the market by near record low interest rates.”
He adds: “The strength of the remortgage market means that many mid-market borrowers – who often benefit most from switching – are flocking to lenders in search of a cheaper deal, support by advice from mortgage professionals.”