Yorkshire market is first-time buyer hotspot

• One-in-three loans go to small deposit buyers in Yorkshire region
• Buyers in London still face struggle to get onto property ladder
• Number of UK mortgage approvals up on February

The North-South regional divide in the UK was seen once again in March, with buyers across the country facing varied mortgage and housing markets.

The latest Mortgage Monitor from e.surv, one of the UK’s largest residential chartered surveyors, shows that the Yorkshire market is the most attractive towards first-time buyers and others with small deposits.

By contrast, London continues to be the toughest for those with smaller deposits.

Across the UK there were 66,614 mortgages approved (seasonally adjusted) during March 2018.

This is up 4.2% compared to February but down marginally – 1.3% – on the figure recorded a year ago.

With further speculation that the Bank of England base rate will rise again in the next few months, the summer months could see strong activity as more homeowners look to remortgage and secure a low rate.

Across England, Scotland, Wales and Northern Ireland some 19.6% of all mortgage approvals were to those with smaller deposits.

While this figure is down on the 21.1% recorded last month, it remains higher than the most recent low in the market.

In December 2017, 18.2% of loans were to small deposit borrowers while in November this figure was just 17.2%.

Richard Sexton, a Director of e.surv Chartered Surveyors, comments:

“As talk of a further base rate increase continues to gather momentum, we are seeing many borrowers fix their rate and protect themselves against future rises.

“This has contributed to the growth in the mortgage market compared to last month.

“While the proportion of loans being given to first-time buyers has declined month on month, this month’s data shows the overall market is in a much stronger position than at the end of 2017.”

Monthly number of total sterling approvals for house purchases (seasonally adjusted):

Strong growth in large deposit loans

The number of mortgages approved for borrowers with a large deposit increased substantially compared to a month ago.

These borrowers, defined by this survey as those with a deposit of 60% or more, made up 34.5% of the market in March 2018.

This is the highest ratio seen so far this year, more than the 33.1% recorded last month and the 33.5% back in January.

This figure was last higher in December 2017, when 35.9% of all loans went to this part of the market.

At the same time, the proportion of mid-market borrowers has remained steady. This month 45.9% of all approvals were to these borrowers, in line with the 45.8% recorded in February.

While the size of the overall market has increased compared to a month ago, there was a decline in the number of small deposit loans.

On an absolute basis there were 13,056 loans approved to these borrowers this month versus 14,060 in the last survey.

Richard Sexton, a Director of e.surv Chartered Surveyors, comments:

“We are seeing many existing homeowners – who tend to have more equity in their properties – looking to remortgage.

“This means a greater proportion of loans are being given to these borrowers than a month ago.”

Proportion of large deposit loans by region:

Regional disparity continues for buyers

The Yorkshire region saw a greater proportion of small deposit borrowers than any other part of the UK in March 2018.

Some 30.3% of all approvals in the region went to first-time buyers and others with small deposits this month.

In Northern Ireland 29.4% of all loans went to this segment of the market while the North West rounded out the top three with 26.9%.

These three areas were the only to record more than 25% of loans going to small deposit buyers.

Yorkshire was the sole region to have a greater proportion of small deposit borrowers than large deposit ones.

It saw 24% of its mortgages go to those with larger cash piles during March – the lowest ratio in the country.

London continues to be dominated by those with larger deposits.

This month, 41.2% of all loans went to those with big deposits compared to just 13% for small deposit borrowers.

Scotland was the market with the second biggest disparity, with 39% of loans going to large deposit buyers versus 17.1% for their small deposit counterparts.

Other areas which had a high proportion of large deposit buyers were the South East (38.6%), the South and South Wales (36.5%) and Eastern England 36.3%.

Proportion of small deposit loans by region:

Richard Sexton, a Director at e.surv Chartered Surveyors, concludes:

“If you were a first-time buyer with the ability to live and work anywhere, the Yorkshire market would be the first place to start your house hunting.

“It is the only market in the UK which is more dominated by small deposit buyers than those with large deposits of cash.

“This is in stark contrast to London, where just 13% of all mortgages go to those with small deposits, versus a whopping 41.2% to those with large deposits.”

Data source: e.surv Chartered Surveyors

Data from: March 2018