E.surv has reported that mortgage approvals during August were significantly higher than on the same month last year.
The chartered surveyors’ latest Mortgage Monitor found that during August there were 66,145 loans (seasonally adjusted) approved to borrowers across the country. This is 7.8% higher than the total recorded during August 2016.
While the overall mortgage market has been growing, the proportion of loans granted to buyers with a small deposit has also been increasing. This month some 2 0.3% of all loans went to this market segment, higher than the 19.6% recorded during July 2017’s survey.
While the number of small deposit buyers is growing in both absolute and percentage terms, the figure for August remains below the 2017 peak of 21.5% – recorded in April. However, it is well above the most recent low – recorded in December 2016 – when those with small deposits represented just 16.1% of the market.
Richard Sexton (pictured), director of e.surv, said: “As the summer draws to a close, the UK mortgage market is in a much healthier position than a year ago. Approval rates are 7.8% higher year-on-year and first-time buyers are taking more of the overall market.
“A year ago the market was dealing with reverbe rations of the Brexit vote, but the past 12 months have seen a strong recovery for the mortgage industry and the outlook for the future looks more settled.”
Large deposit borrowers – defined as those with a deposit of 60% or more – saw their share of the overall market grow during August.
These borrowers accounted for 34.44% of the overall mortgage market this month, fractionally up on the 34.2% recorded in July.
However, this is now the seventh successive month where borrowers with large deposits have occupied less than 35% of the overall mortgage market.
E.surv said that with the proportion of both small and large deposit borrowers increasing this month, it meant those mid-market customers were squeezed. While still outnumbering the other two market segments, the proportion of mid-market borrowers was 45.3% during August. This compares to 46.2% in July.
The number of small deposit buyers – a category which includes many first-time buyers – rose as both a percentage and on an absolute basis in this survey. There were 13,427 approvals to these borrowers this month compared to 12,952 during July.
Sexton added: “Mid-market borrowers found themselves squeezed this month as the number of approvals to bigger and smaller deposit borrowers increased.
“Those with large pots of cash or equity always find it easiest to get a mortgage application approved, as lenders are most eager to take their business. At the other end of the scale, government schemes and lender offers are helping more first-time buyers get onto the ladder.”