More significantly, given that December is traditionally a slow month, the number of applications received in January 2012 was 25.8% higher than in January 2011. The average loan to value on mortgage applications for purchase business remained steady at 72% in January 2012, compared to last month and also January 2011.
The average deposit put down by mortgage applicants in January 2012 was £56,167, down slightly from £57,088 in December but up 7.4% on the same period in 2011 (£52,284). Similarly, the average purchase price in January stood at £194,512, which was up 7.77% from January 2011 (£180,486), and up 0.93% from £192,726 in December.
The average loan size on purchase mortgage applications rose to £138,345 in January, up from £135,638 in December and £128,202 in January 2011. While average incomes of purchase borrowers increased only slightly from £35,288 in December 2011 to £35,327 in January, they have risen 5.81% since January 2011.
The percentage of applicants applying for fixed rate deals in January 2012 was 72.2%, down from 75.8% in December and 75% in January 2011.
Affordability data
Affordability is up very slightly on December as, despite the average annual income to purchase price ratio rising to 18.5% from 17.9% in January 2012, the average loan amount to annual income ratio dropped from 26% in December to 25.5%, as a result of the average deposit to annual income ratio increasing from 61.8% to 62.9% in January.
Year-on-year rates have fallen, and the average rate on a two-year fixed rate deal in January 2012 was 4.27% compared to 4.4% in January 2011. It is the same story for three-year fixed rates (4.53% in January 2012 compared to 4.99% last year), and five-year fixed rate deals (4.61% this year versus 5.33% last year).
However, the average two-year tracker deal was slightly higher (3.5% as opposed to 3.47% in January 2011). The number of mortgage products available through intermediaries in January 2012 was 6,517, down from 7,149 in December 2011 but up year-on-year from 5,410 in January 2011.
Regional data
The average mortgage loan for purchase deals is now more than £100,000 across six regions. The largest average loan size on applications was unsurprisingly to be found in Greater London, and has increased again from £245,341 in December 2011 to £275,915 in January 2012. This was also the largest percentage increase too, up 12.5% month on month.
Outside of London, Wales saw the largest increase in the size of mortgages being applied for, with the average mortgage topping £100,000 – up from £98,289 to £103,784. The average size of deposits on purchase deals fell in seven out of ten regions.
This is likely to be a result of the greater availability of higher loan-to-value mortgages. And this, together with the expiration of the stamp duty concession for first-time buyers in March will have contributed to the increased level of activity in applications in January.
Remortgage data:
The average loan to value on remortgage applications has fallen from 58.7% in December 2011 to 57.7% in January 2012, although it is still higher than the same time last year (54.7%).
The average loan size applied for by remortgage applicants has fallen from £149,184 in December to £148,417 in January 2012. The year on year data shows the average loan size on remortgage applications has fallen 3.5% from £153,727 (January 2011).
This is partly explained by an increase in the average amount of equity being put down by remortgage applicants, which has increased from £106,641 at the end of 2011 to £109,132 in January 2012. However, the year on year figures show the amount of equity being put down by remortgage applicants has fallen 22.8% from £141,342.
The percentage of remortgage applicants choosing fixed rate deals stood at 68.4% in January 2012, up from 62.4% in December 2011, but down from 69% in January last year.
Brian Murphy, head of lending, Mortgage Advice Bureau commented:
“The new-year has started comparatively positively in spite of the generally negative economic situation and low levels of consumer confidence we have once again witnessed an increase in both purchase and remortgage borrowers against the same period twelve months ago.
"Fixed rates remain the product of choice for the majority of borrowers with almost three quarters of purchasers and more than two thirds of remortgage customers fixing their mortgages.
“Overall mortgage product numbers actually reduced further during January from December but although the number of deals typically available to intermediaries has reduced to around 6,500, they remain more than 20% ahead of the same period in 2011.
“Although overall numbers of products slipped back a little, more lenders have entered the high loan to value arena with further deals being offered at 90% and even 95% of a property’s purchase price or value.
"This is good news for prospective first time buyers and for those home movers with low levels of equity as the perception of many potential borrowers is that mortgages are only available to those with a 20% or more deposit.
“Expectations for 2012 are for a housing market broadly similar in size to 2011 with activity levels remaining subdued relative to historic levels but, with some increase in appetite being shown amongst a number of lenders to help aspiring buyers into the market the outlook is generally more positive.”
