60,011 house purchase mortgages (seasonally adjusted) were approved in September, according to the latest Mortgage Monitor from e.surv.
This figure is virtually level compared to August’s figure of 60,912 although it is well down on 2015’s figure.
The number of approvals in September 2016 was 14% lower than the same month in a year ago, the survey found.
It also remains well below 2016’s peak of 72,512, recorded in February, although e.surv said this figure was boosted by buyers making house purchases before April’s stamp duty tax changes.
The proportion of loans made to borrowers with a deposit of less than 15% remains above the level seen a year ago. Some 17.9% of loans were made to borrowers with smaller deposits in September, higher than the 17.3% recorded in the same month last year. This suggests that first-time buyers are not bearing the brunt of lenders’ reduced activity, e.surv said.
Richard Sexton, director of e.surv chartered surveyors, said: “Despite many predicting a post-Brexit slump in the mortgage world, the market appears to have already levelled out and there is now a platform for growth in future months.
“Policy statements from government and the Bank of England appear to have restored confidence to the market and, while activity is lower than a year ago, it is far from the disaster some had predicted. Low mortgage rates are likely to entice more people back into the market in the coming months.
“In fact, for first-time buyers the mortgage market is looking much healthier than last year. Rates are lower and lenders are approving a higher proportion of loans to small deposit borrowers than they did 12 months ago. This is great news for those trying to make their first step onto the property ladder.”
The proportion of loans made to borrowers with small deposits was 17.9% in September, higher than a year ago when 17.3% off all loans went to this segment of the market.
This figure was down on the 18.6% recorded in August, although this figure was the highest seen this year. Small deposit borrowers are defined as buyers with a deposit worth 15% or less of their properties’ total value.
Sexton said: “While the proportion of loans made to small deposit buyers slipped back between August and September, these figures are still positive compared to a year ago.
“A more pressing concern for first-time buyers is the lack of suitable housing stock at affordable prices. The UK needs to build more housing to match the demand and it remains to be seen whether Theresa May’s new administration will be able to turn words into action and boost building.
“First-time buyers are crucial for the entire mortgage market, starting chains and allowing existing homeowners to move up the ladder. Meanwhile the market for borrowers with large deposits remains robust, with mortgage rates for this part of the market at historic lows.”
