According to e.surv, the proportion of small-deposit lending also increased, accounting for 15.7% of overall house purchase loans granted compared to 14.5% the previous month.
However, this proportion continues to lag behind the 16.3% seen across the last couple of months of 2015, as a proportional rise in buy-to-let lending makes its mark.
Although small-deposit borrowing rose in February, completed first-time buyer sales fell 4.8% month-on-month
Richard Sexton, director of e.surv chartered surveyors, commented:
“First-time buyers look set to enjoy an early spring, with small-deposit lending bouncing back from a January dip. The proportion of small-deposit lending has risen this month, as have the number of loans granted. This is great news but also raises some serious questions of the housing market. Demand is sustained and there do not appear any factors on the horizon that may diminish it.
“Building new homes is one answer, but it can’t solve the UK’s supply issues on its own. Things need to get moving again – the rhythm of moving and selling, upsizing and downsizing needs to be maintained, and encouraged. There’s a danger that legislative changes, such as stamp duty, are potentially putting people off and slowing down property movements. With fewer homes on the market, it’s not necessarily an easy road ahead but lending levels are encouraging. Lenders are doing their bit to support first-timers and now is the time for action to confront the supply side.”
