The latest Mortgage Monitor from e.surv chartered surveyors revealed positive news for the mortgage broker and the mortgage industry as a whole last week.
The number of mortgage approvals in November hit their highest figure since December 2009 and were 15 per cent higher than the same period last year (November 2010).The increase in the amount of successful loans is sparked by the loosest lending environment since the Lehman Brothers collapse in October 2007.
The number loans approved for purchases rose from 52,743 in October to 54,658 in November, revealing an increase of 4 per cent on a seasonally-adjusted basis and 15 per cent higher than the figures recorded in November 2010. The research from e.surv also suggests lending criteria is easing, which is supported by the fall in the amount of average deposit required, down to 38 per cent from the 40 per cent required in October and the 42 per cent in November 2010. Many mortgage lenders have launched a number of best value mortgages, in order to entice borrowers and increase their market share.
E.surv said the rise in purchase approvals was driven by an increase in the number of first time buyers as well as low income buyers, who were the main recipients of the looser lending criteria as there were a higher proportion of borrowers with small deposits. Loans to borrowers with a deposit of 15% or less accounted for 13 per cent of all lending in November, up from 10 per cent in October and the highest proportion since October 2008. First time buyers saw their average deposits on a typical FTB property fall to its lowest amount since August 2008, to 31 per cent and was down from 33 per cent required in October.
In addition to the rise in purchase approvals, Buy-To-Let investors are taking advantage of the increased lender appetite to support professional BTL Landlord in particular. Purchase approvals for properties worth less than £125,000 a typical first time buyer and buy-to-let property, rose to 12.791 in November up from 11,904 in October. Wealthier buyers are starting to represent a lower proportion of the market according to the report with loans for purchases below £250,000 accounting for almost 75 per cent of all loans.
Richard Sexton, director of e.surv said “The market is thus far showing resilience in the face of the chaos emanating from the eurozone. For the last few months, the banks have been focusing their lending on specific groups, particularly buy-to-let investors, but this is the first time they appear to have increased lending to first time buyers in any notable sort of volume.”