First-time buyers and small deposit borrowers continue to increase their share of the mortgage market
Homeowners are continuing to take advantage of low mortgage rates, according to the latest figures.
Data from residential chartered surveyors e.surv reports that the number of mortgage approvals increased by 2.7% in the year to April to 65,781.
The rise has been largely fuelled by existing owners, who are benefitting from the lower mortgage rates resulting from the competition between High Street banks and other mortgage lenders, despite overall new activity stagnating in the wider housing market.
According to e.surv, new mortgage approvals jumped by 5.5% between March and April, whilst over a quarter (28.5%) of lending was given to first-time homeowners and buyers with smaller deposits in April, compared to 26% in March.
By comparison, mortgage approvals to buyers with larger deposits declined in April, with less than 1 in 4 (24.3%) approvals going to these borrowers, down from 26.2% in March.
“In many parts of London and the South East, the property market continues to move slowly. Yet this has not translated into the mortgage market with activity remaining strong,” said Richard Sexton, Director at e.surv.
“There has been a healthy increase in the proportion of loans going to first time buyers, showing that lenders are welcoming these customers.”
He concluded: “Large deposit borrowers once held a tight grip on the mortgage market but that has loosened in recent times. Yet the low rates available mean that there are still many current homeowners coming to the market for new loans.”
However, recent research by London Central Portfolio revealed the number of first-time buyer transactions claiming stamp duty relief declined year-on-year in Q1 2019.