Mortgage approvals hit a 15-month high in August, giving a glimmer of hope to first-time buyers with smaller deposits.
Data from surveyors group e.Surv showed the highest year-on-year increase since May 2010, with approvals up from 49,239 in July to a seasonally adjusted 49,566 in August.
More than 10pc of these mortgages went to buyers with a deposit of 15pc or less of the value of their home loan, suggesting that the borrowing situation is improving for first-time buyers as mortgage companies loosen their lending criteria.
This was backed up by figures showing that price bracket up to £125,000 – typical first timer property – accounted for 24pc of all approved mortgages, the highest since April this year.
The figures follow the launch of the first 100pc mortgage since the credit crunch, suggesting that lenders are once again competing for borrowers with less money saved. However, Richard Sexton, from e.Surv, warned that the public “should not get carried away” imagining that the problems surrounding mortgage availability had dissipated.
“A slight loosening in criteria only makes a small dent in the vast backlog of buyers stuck in the rental market,” he said.
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David Newnes, director LSL Property Services said that the cheapest mortgage deals “are still only available to those able to muster at least a 30pc deposit”.
“It is good news that high loan to value lending is increase but it’s rising from a very low level and will have to continue rising for some time before we’re likely to see a sustained revival in the market for first-time buyers,” he said.
The e.Surv data is published several weeks before the Bank of England’s definitive mortgage approval data, but the typical margin of error most month is 1pc compared to the official data.
The figures come as LSL, which uses an index of house price indices as well as Land Registry Data, said that that the housing market had seen prices rise further in August, with transactions up 1.5pc and bucking the seasonal trend. The average price of a home increased by 0.3pc during August, but is still down 2.2pc year-on-year. However, London prices rose 1.6pc, which LSL attributes cash buyers pushing up demand.
by the Telegraph
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