May sees further boost to mortgage market

• Activity remains strong across the country
• Yorkshire continues to be first-time buyer hotspot
• Competitive mortgage rates drive existing homeowners to take out new loans

A strong performance in April was followed by an equally active May for the mortgage market, which showed no signs of being affected by the slowdown facing the property market.

The latest Mortgage Monitor from e.surv, the UK’s largest residential chartered surveyors, found that there were 65,801 residential mortgages approved during May 2019 (seasonally adjusted).

This represents a 1.2% rise compared to the same month a year earlier.

This growth comes at a time when activity in the property market has tailed off in many areas, with many local markets showing little signs of growth.

It is existing homeowners who have driven the mortgage market forward so far in 2019. This is because mortgage lenders have continued to offer competitive deals, despite many having to contend with higher funding costs.

May’s lending total did drop back slightly from last month’s figure, falling by 0.7% month-on-month.

The proportion of loans given to first-time buyers and others with small deposits also declined when compared to April’s stellar figure, dropping by 0.7%.

However, this figure is still well ahead of the 26% recorded in March and demonstrates the strong performance of the first-time buyer market, even when others are holding off on making purchases.

Richard Sexton, Director at e.surv, comments:

“The doom and gloom in the property market seems a mile away from the positive stories coming out of the mortgage market.

“While few people are moving when they don’t have to, first-time buyers are still desperate to get onto the ladder.

“As for existing homeowners, they are being tempted into the market by near record low interest rates. Those looking to switch could save hundreds of pounds a month by moving to a cheaper deal from a rival lender.”

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

Mid-market borrowers continue to dominate

The proportion of mortgage approvals to borrowers with a small deposit dropped back slightly in May.

Large deposit borrowers felt the benefit somewhat, but it was the mid-market which saw the greatest increase in activity.

Over the course of the month, 27.7% of all loans went to smaller deposit borrowers, down compared to last month.

Meanwhile the number of loans to their larger deposit counterparts grew modestly from 24.3% to 24.5%.

This meant it was mid-market borrowers who increased their share of the market most substantially, growing from 47.2% to 47.8% month-on-month.

This returns activity to the exact level recorded in March.

On an absolute basis, the number of small deposit borrowers dropped from 18,748 to 18,227.

Richard Sexton, Director at e.surv, comments:

“The strength of the remortgage market means that many mid-market borrowers, who often benefit most from switching, are flocking to lenders in search of a cheaper deal, supported by advice from mortgage professionals.”

Proportion of large deposit loans by region:

Yorkshire holds on to small deposit hotspot title

The North West failed to leapfrog Yorkshire, with the latter taking the crown as small deposit hotspot once more in May.

The region offered the most favourable market conditions for small deposit borrowers this month. This means it has held its place at the top of the chart throughout 2019 so far.

In Yorkshire 34.9% of all loans went to this part of the market, higher than all rival regions.

In the North West, the nearest challenger, this figure was 33.7%. The only other region to record over 30% was the Midlands, which registered a total of 31.3% this month.

At the other end of the scale, London was once again the most difficult market for these borrowers, with just 17.5% of loans in the capital made to these customers.

London was once again dominated by those with large amounts of equity, with 32.8% of all loans going to those with cash to splash.

This is ahead of South East, which recorded 27.9%, and Eastern England, which was 25.9%.

By contrast, the proportion of large deposit borrowers in Yorkshire was 19.1% and in the North West 19.3%.

Proportion of small deposit loans by region:

Richard Sexton, Director at e.surv, concludes:

“Few people are likely to move to the other end of the country purely in search of a cheap house, but those in, or close to Yorkshire stand a much better chance of getting onto the property ladder with a small deposit.

“The North West and the Midlands have also proven strong places to get onto the ladder for the first time, with 30% of all loans going to this part of the market.

“Once again it is those looking to make a purchase in London and the South East that will need to have the most cash as a deposit.”

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

Charlotte Merlin-Jones
Account Manager, Rostrum 
[email protected]
0207 440 8686