Promising signs of recovery for mortgage market

January saw approvals for mortgages reach a four year high, according to research from e.surv. The Chartered Surveyors, put the rise down to a combination of falling mortgage rates, a wider range of mortgages available and an improvement in lender confidence.

e.surv's latest Mortgage Monitor shows mortgage approvals climbed 17% from 55,785 in December to 65,184 in January, making it the strongest month for house purchase lending since February 2008 – pre- financial crisis.

It also marked a 13% improvement on January last year. e.Surv said it is the strongest indication yet that the mortgage market is beginning to recover and regain some of its pre-2008 health. The firm reported that the improvement in lending was driven by high LTV borrowers and first-time buyers, who accounted for the biggest overall share of the increase.

Lending to borrowers with a deposit of less than 15% increased by 30% between December and January, reflecting a significant improvement in the availability and affordability of first-time buyer loans.

The research is released in the same week that figures on Buy-to-let lending show they accounted for 11.5% of total gross mortgage lending in 2012, up from 9.8% in 2011, the Council of Mortgage Lenders full-year data shows. At £16.4 billion, gross buy-to-let lending was 19% higher than the £13.8 billion advanced in 2011, reaching its highest level for four years. By number, a total of 136,900 buy-to-let loans were advanced during 2012 (of which nearly half were for buy to let remortgages.

The total number of buy-to-let mortgages outstanding at the end of 2012 stood at 1,445,300, accounting for 13% of all mortgages. CML director general Paul Smee comments: "Buy-to-let is benefiting from strong demand, which is likely to continue. Loan performance compares favourably with the owner-occupier sector, and the overall outlook for the buy-to-let sector is positive. Landlords who can demonstrate a strong track record are in a good position to expand their portfolios” he said.