Last month saw a large increase in mortgage applications over December, with a rise of 52.7%, according to Mortgage Advice Bureau’s latest National Mortgage Index.
The number of applications received in January 2012 was 25.8% higher than in January 2011. The average loan to value on mortgage applications for purchase business remained steady at 72% in January 2012, compared to last month and also January 2011.
Mortgage Advice Bureau said the average deposit put down by mortgage applicants in January 2012 was £56,167, down slightly from £57,088 in December but up 7.4% on the same period in 2011 (£52,284).
The average purchase price in January stood at £194,512, which was up 7.77% from January 2011 (£180,486) and up 0.93% from £192,726 in December.
The average loan size on purchase mortgage applications rose to £138,345 in January, up from £135,638 in December and £128,202 in January 2011. While average incomes of purchase borrowers increased only slightly from £35,288 in December 2011 to £35,327 in January, they have risen 5.81% since January 2011.
The percentage of applicants applying for fixed rate deals in January 2012 was 72.2%, down from 75.8% in December and 75% in January 2011.
While the average annual income to purchase price ratio rising to 18.5% from 17.9% in January 2012, the average loan amount to annual income ratio dropped from 26% in December to 25.5%, as a result of the average deposit to annual income ratio increasing from 61.8% to 62.9% in January.
Year-on-year rates have fallen, and the average rate on a two-year fixed rate deal in January 2012 was 4.27% compared to 4.4% in January 2011. It is the same story for three-year fixed rates (4.53% in January 2012 compared to 4.99% last year), and five-year fixed rate deals (4.61% this year versus 5.33% last year). However, the average two-year tracker deal was slightly higher (3.5% as opposed to 3.47% in January 2011). The number of mortgage products available through intermediaries in January 2012 was 6,517, down from 7,149 in December 2011 but up year-on-year from 5,410 in January 2011.
The average loan to value on remortgage applications has fallen from 58.7% in December 2011 to 57.7% in January 2012, although it is still higher than the same time last year (54.7%). The average loan size applied for by remortgage applicants has fallen from £149,184 in December to £148,417 in January 2012. The year on year data shows the average loan size on remortgage applications has fallen 3.5% from £153,727 (January 2011).
Brian Murphy, head of lending at Mortgage Advice Bureau, said: “The new-year has started comparatively positively in spite of the generally negative economic situation and low levels of consumer confidence we have once again witnessed an increase in both purchase and remortgage borrowers against the same period twelve months ago. Fixed rates remain the product of choice for the majority of borrowers with almost three quarters of purchasers and more than two thirds of remortgage customers fixing their mortgages.