Mortgage approvals fall year-on-year: e.surv

Those with smaller deposits continued to be squeezed out of the housing market in October, according to the latest monthly mortgage monitor by e.surv.

E.surv, one of the UK’s largest residential chartered surveyors, found that while the number of mortgage approvals remained level, the percentage going to those with smaller deposits fell, to just to 17.7 per cent of all loans.

This is down on both September and August figures, where this sector of the market accounted for 20.3 per cent of all loans.

Overall there were 66,136 mortgage approvals in October. This figure was flat compared to September, but down 1.5 per cent compared to the number of mortgage approvals seen in October last year.

e.surv director Richard Sexton says: “The mortgage market performed above expectations all summer, so for this to continue well into the autumn is good news for would-be borrowers.

“However the drop off in small deposit borrowers – which includes many first-time buyers – should also be noted. This once again highlights the fact that more should be done to help young borrowers get onto the property ladder.”

Sexton noted that these figures relate to mortgage approvals in October, before the Base Rate rise in November and the stamp duty changes in the Budget, which are designed to make house purchase more affordable for first-time buyers.

As the number of smaller deposit buyers dropped this gap has been filled by those with large deposits – defined as those with a deposit of 60 per cent or more. This group of borrowers had a higher proportion of the market in October than in any month so far this year. In total 36.5 per cent of all mortgage loans went to this segment of the market last month.

Sexton adds: “With the period of historically low mortgage rates appears to be ending, many homeowners have remortgaged to lock in a good deal. This has meant smaller borrowers have been squeezed out, but hopefully this is just a temporary shift.”

Given the property price differential across the country it is perhaps not surprising that Northern Ireland and the northern regions of England continue to offer the best opportunities for those with smaller deposits.

The North West had a higher proportion of these borrowers than any other region during October, where some 27.5 per cent of all loans when to small deposit buyers.

In contrast, just 8 per cent of mortgage approvals in London, and 13 per cent in the South East when to those with smaller deposits. In London 44 per cent of mortgage approvals were to those who had at least 60 per cent deposit. In the South East this figure was almost as high, at 43.2 per cent.

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