First-time buyers and other borrowers with small deposits took a greater share of the market in September compared to August, according to e.surv.
The surveyors’ mortgage monitor report found there were 66,704 mortgages approved during September. The proportion of the market targeted at borrowers with small deposits (with a deposit of 15 per cent or less) increased from 22.8 per cent to 24.2 per cent between August and September.
Borrowers with large deposits (40 per cent or more) saw their market share fall in September, now accounting for 30 per cent of the UK mortgage market. This is lower than the 32.5 per cent recorded in August and 33.8 per cent seen in July.
Mid-market borrowers (with deposits from 15 to 40 per cent) also saw an increase in market share. These borrowers represented 45.8 per cent of the overall market, compared to 44.7 per cent a month ago.
September was the first month many homeowners would have received their higher mortgage bills if they are on a standard variable rate following the base rate increase in August. But first-time buyers would be unaffected by this.
Young buyers may have been helped onto the ladder by the fact house price growth has slowed across many areas of the country. Lower prices mean would-be buyers can achieve their dream of home ownership much sooner, and this appears to have been borne out by these figures.
e.surv director Richard Sexton says: “There has been a shift in the market towards young borrowers in September, it will be interesting to see whether this carries on into October and the rest of the year. But with existing homeowners trapped on expensive standard variable rates now feeling the cost of higher mortgage rates, the remortgage market cannot be underestimated.
“Remortgage activity was up compared to last month, and September 2017. Despite the rate rise, new mortgage borrowing is still very competitive and homeowners will continue to be tempted by cheap fixed rates. This will protect them against future base rate rises.”