April sees rise in mortgage approvals

• Housing market slowdown yet to affect mortgages
• First-time buyers benefit from increased lender focus
• Strong growth in number of small deposit borrowers

 The latest Mortgage Monitor from e.surv, the UK’s largest residential chartered surveyors, found that 66,174 mortgages were approved during March 2019 (seasonally adjusted).

This figure is 4% higher than the same month a year ago, even if the purchase and sale of properties continues to be subdued.

Low rates have created favourable conditions for existing homeowners looking to take out new loans, and first-time buyer activity has increased, despite the slowdown in the wider market.

Across all parts of the market, approvals were also up month-on-month, rising 2.9% between February and March.

The proportion of loans given to small deposit borrowers fell slightly compared to the last survey, but still represents a significant share of the mortgage market.

The number of loans to these customers dropped from 26.3% to 26%.

Richard Sexton, Director at e.surv, comments:

“Mortgage rates have increased slightly compared to the rock-bottom lows of the last few years.

“However, rates are still close to their historic lows which is good news for those looking to take their first steps.

“This is reflected in the number of approvals this month…”

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

Large deposit borrowers squeezed once more

The recent squeeze on borrowers with large deposits continued into March, with the proportion of loans going to this part of the market falling once again.

Some 26.2% of all mortgages were taken out by this type of borrower in March. This is down on the 26.9% recorded in February.

This is even further back from the 28.1% ratio seen in January and the 30.1% found in December.

This fall, coupled with the modest drop in small deposit lending, meant that mid-market borrowers were the main beneficiaries.

Almost half of all loans went to this segment of the market – 47.8%. This is higher than the 46.8% recorded a month ago and further ahead of the 44.8% from January.

On an absolute basis, the number of small deposit borrowers fell from 17,480 to 17,205 between February and March.

Richard Sexton, Director at e.surv, comments:

“With almost half of all mortgages going to mid- market borrowers, it is clear that many current homeowners are still coming to market for new loans. This may be because they are keen to lock into loans at the current historically low rates in the hope that it will save them money in the long term.”

Proportion of large deposit loans by region:

Yorkshire remains on top for first-time buyers

First-time buyers, and others looking to purchase in Yorkshire benefited from the most favourable market conditions for small deposit borrowers.

More than a third of the region’s mortgage approvals were to those with little equity or cash to spare – 36.6%.

This is the fifth successive month that the region has held this crown, covering the whole of the current calendar year.

Its closest rivals were the North West – where 35.1% of loans went to this part of the market – and the Midlands, where the figure was 31.8%.

By contrast, those looking to buy in London had a much tougher time, accounting for just 18.9% of approvals recorded in April.

The capital was the area of the country most dominated by large deposit borrowers, with 33% of all loans going to this market segment.

This was ahead of the South East region, which scored 28.1% this month. Behind that were Northern Ireland and the South and South Wales regions, both on 25.5%.

In Eastern England this ratio was 25.2%, with all other regions having fewer than a quarter of loans taken out by large deposit customers.

Proportion of small deposit loans by region:

Richard Sexton, Director at e.surv, concludes:

“In recent years we have seen Yorkshire, the North West and Northern Ireland battle it out to be the most favourable place for first-time buyers to get onto the ladder.

“Yet we have seen a shift this year with Yorkshire taking the lead in every month so far in 2019.

“That’s not to say the other areas have become difficult places to buy, both the North West and Northern Ireland offer good value to would-be homeowners.”

Notes to Editors

Methodology

e.surv analyses detailed data on over one million mortgage valuations the firm carried out between August 2006 and today. Each month, the researchers analyse tens of thousands of valuations and use these trends to extrapolate from the Bank of England’s mortgage data to publish mortgage approval numbers for the whole of the UK, before the Bank of England.

The Mortgage Monitor is prepared by Rostrum for e.surv. The copyright and all other intellectual property rights in the Mortgage Monitor belong to e.surv. Reproduction in whole or part is not permitted unless an acknowledgement to e.surv as the source is included. No modification is permitted without e.surv’s prior written consent.

Whilst care is taken in the compilation of the report, no representation or assurances are made as to its accuracy or completeness. e.surv reserves the right to vary the methodology and to edit or discontinue the report in whole or in part at any time. 

About e.surv

e.surv is the UK’s largest valuation provider, directly employing over 600 residential surveyors across the UK, supported by a network of consultant valuers. The business is the largest distributor and manager of valuation instructions in the UK and is appointed as Panel Manager for more than 20 mortgage lenders and other entities with interests in residential property. The business also provides a number of private survey products direct to the home-buying public. e.surv is a subsidiary of LSL Property Services plc. For further information, see www.www.esurv.co.uk.

Press contacts

Amelia Graham
Senior Account Executive, Rostrum 
[email protected]
0207 440 8673