Large deposit market share hits eight-month high ahead of rate rise: e.surv

Mortgage approvals remained relatively flat between August and September, but are still well above the levels recorded a year ago, according to e.surv data.

Related topics:  Mortgages
Rozi Jones
3rd November 2017
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"Mortgage approval rates have remained impressively high over the summer months, as buyers take advantage of low mortgage rates"

However, the proportion of the market taken by small deposit borrowers has dropped month-on-month, falling from 20.3% to 19.8%.

This is still well ahead of the most recent low point for the market - in December 2016 - when small deposit borrowers made up just 16.1% of the market. However, it is also some way off the 2017 peak of 21.5%, which was recorded in April.

Large deposit borrowers - defined as those with a deposit of 60% or more - gained their highest share of the market for eight months in September, accounting for 35% of the mortgage market.

Richard Sexton, Director of e.surv, believes that as mortgage rates began to creep up in response to rate rise speculation, "perhaps this has prompted homeowners to take action and secure a low rate while they can".

First-time buyers and others who have small deposits continue to have the best mortgage chances in northern areas.

August saw Yorkshire being crowned as the region with the greatest proportion of small deposit buyers, while this month it was the North West which has taken the top spot.

32.7% of all loans in the North West went to this segment of the market during September, ahead of every other region surveyed.

Only the North West and Yorkshire saw a greater proportion of loans approved to small deposit buyers than their larger deposit rivals. In the North West 23% of the total market went to those with large amounts of equity while in Yorkshire the figure was 25.1%.

Buyers in London and the South East found the going more tough if they had a small deposit. In the capital just 13.1% of approvals went to these borrowers versus 40.7% who had a larger cash pile.

Richard Sexton, Director of e.surv, commented: “Mortgage approval rates have remained impressively high over the summer months, as buyers take advantage of low mortgage rates and buy a home for the first time or move up the property ladder.

“It is particularly striking when compared to 12 months ago when the market was contracting following the UK’s decision to leave the European Union. A year later and the housing market is back on its feet and motoring along nicely.

“Remortgage activity is very high at the moment and, while rates are starting to rise, there are still many great deals on the market for borrowers to take advantage of."

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