Mortgages

Low mortgage rates boost first-time buyer figures: e.surv

Small deposit borrowers grew their market share from 27.9% to 28.3% between July and August.

Rozi Jones
|
24th September 2019
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"While Yorkshire has continued to lead the way as the small deposit borrower hotspot, other regions are proving equally attractive to first-time buyers."

An ongoing period of low mortgage rates and stagnant house price growth has helped boost the number of mortgages approved to small deposit buyers, according to the latest research from e.surv.

Although the total number of residential mortgage approvals dipped by 1.9% between July and August, small deposit borrowers grew their market share from 27.9% to 28.3%. This share is also ahead of the 27.7% recorded in May and June.

Yorkshire remained the best place to buy for people with small deposits, although other regions proved almost as attractive for these buyers.

The region has topped the charts for seven of the eight months in 2019 so far - only being beaten by Northern Ireland in July - but now faces a challenge to keep its crown.

This month 35.4% of all loans in Yorkshire were to those with small deposits. This is marginally ahead of the North West, where this figure is 34.5%, and Northern Ireland, were the ratio recorded was 33.2%.

In all three regions over a third of lending went to borrowers with an LTV of more than 85%, while the Midlands followed closely at 31.2%.

Predictably, London borrowers continued to have the most difficult time, with just 19.4% of all loans in the capital being given to small deposit applicants.

Richard Sexton, director at e.surv, commented: “While mortgage rates have ticked up in the last couple of years, more recently deals have started to become cheaper.

“Swap rates, which are used by lenders to help price mortgage rates, have fallen, with lenders passing on these lower funding costs to consumers. The outcome has been a new wave of cut-price deals, which have tempted homeowners and first-time buyers to market.

“The rise in the number of small deposit customers shows the property market is starting to tilt in favour of first-time buyers and others unable to pull together large deposits. The number of mortgage schemes to help first-time buyers has also given then a timely boost.”

“While Yorkshire has continued to lead the way as the small deposit borrower hotspot, other regions are proving equally attractive to first-time buyers. The North West and Northern Ireland have both proven to be excellent places for people to buy if they have little cash to spare.

“Those in London and the South East have less opportunity, but with prices slowing the most in these areas, there are still great chances for first-time buyers to get onto the ladder.”

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