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Mortgage approvals dip following two ‘stellar’ months

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  • 19/03/2018
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Mortgage approvals dip following two ‘stellar’ months
Mortgage approvals slipped slightly in February while first-time buyers (FTBs) and small deposit mortgages grew, according to data from E.surv.

The surveyor’s monthly update found there were 66,364 mortgages approved (seasonally adjusted) during February 2018 – down 1.25% on January and also down 2.6% compared to last February.

However, it noted positive trends in the number of FTBs and small deposit borrowers.

E.surv’s analysis showed 14,060 loans were approved to small deposit borrowers in February, up from the 13,962 loans in January 2018.

Overall the analysis paints a picture of a continuing steady property market with approvals ranging between 60,000 and 70,000 per month that has persisted since 2016.

 

Deposit clash

Northern Ireland saw a greater proportion of loans to FTBs and others with small deposits than any other part of the UK with 35% of loans in Northern Ireland going to this part of the market.

Yorkshire and the North West also performed well in this respect with 31.3% and 29.8% of loans were to these buyers respectively.

Unsurprisingly, London saw the reverse with just 15.6% of all buyers having a small deposit while 40% had a large amount of equity.

 

Favourable for FTBs

E.surv director Richard Sexton was largely upbeat, noting that while the number of approvals fell slightly in February, this came after “two stellar months” for the UK mortgage market – prompted by a rise in the Bank of England base rate at the end of last year.

“Activity is expected to pick up again in future months as existing homeowners continue to feel the cost of increased mortgage payments in their pockets,” he said.

“Attention will also turn to when the next base rate rise takes place, with many experts predicting this for the late spring or early summer.

“However, with the recent Spring Statement announcing stamp duty relief has helped over 60,000 first-time buyers, market conditions are still very favourable right now for those looking to take their first steps,” he added.

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