The number of loans for house purchase rose to 58,610 in January, according to the latest Mortgage Monitor from e.surv chartered surveyors.
This is the highest level since December 2009, and e.surv said it was largely down to an increase in lending to borrowers with small deposits. The figure represents an 11% increase on the 52,939 purchase approvals in December, and a 29% year-on-year increase from January 2011.
Since January 2011, high-loan-to-value lending has almost doubled. Loans to borrowers with a deposit of under 15% accounted for only 7% of all loans for house purchase back in January last year, but have risen to account for almost 13%.
This has helped more low income and first time buyers get onto the property ladder, with the number of loans to these borrowers increasing at a faster pace than loans to wealthier borrowers. There were 15,329 loans for purchase of homes costing below £125,000 – typical first time buyers property. This was the highest number since March 2008, and a 31% increase from January last year.
There were fewer loans on expensive property in January than in December, as the number of loans for purchase of expensive property fell in all price brackets over £376,000, suggesting wealthier buyers are beginning to represent a less disproportionately large share of the market.
However, e.surv said that despite the improvement, deposit requirements are still high by historic standards, which mean first-time buyer numbers remain suppressed compared to their pre-2008 levels. In January 2007, the average deposit for house purchase loans was 31%, compared to 38% in January 2012.
Richard Sexton, director of e.surv, said: “The mortgage market has so far done a reasonable job in repelling the onslaught from the eurozone. LTVs have trended steadily upwards over the past six months