E.surv chartered surveyors has claimed that first-time buyer numbers rose significantly last year, citing increased LTVs and a loosening of criteria.
According to the firm’s latest Mortgage Monitor, there were 32% more loans with a deposit of 15% or under in 2011 than in 2010, as lending conditions for first time buyers improved. There were 57,301 loans with a deposit of 15% or under in 2011, up from 43,379 in 2010, reflecting the fact more low income buyers were able to get mortgages.
There were 12,343 approvals for purchase of property worth £125,000 or under in December (typical first timer stock), up from 9,873 in December 2010. The average loan-to-value on first time buyer property rose to 69% in December, increasing from 66% in December 2010, as more buyers were able to access higher LTV mortgages.
E.surv said that lending conditions have now eased to their most accessible level since August 2007. In December, the average deposit fell to 38%, down from 41% in December 2010, and fell slightly from November. In 2011 as a whole, the average deposit on a loan fell back from 43% in 2010 to 39%.
In the overall market, loans for home purchase were 3.4% higher in 2011 than 2010. There were 590,733 purchase approvals in 2011, 19,203 more than in 2010.
In December, loans for house purchases were up 19% year-on-year, rising from 42,448 in December 2010 to 50,836. Loans for purchases below £250,000 accounted for almost three-quarters of all loans, compared to around two-thirds in 2009, suggesting wealthier buyers are starting to represent a less disproportionate share of the market, e.surv said. On a monthly basis, purchase approvals fell 4%, reflecting the traditional winter downturn.
Richard Sexton, director of e.surv, said: “The market has defied the wider problems that afflicted the economy in the latter half of last year. The improvement in 2011 is modest