The latest Mortgage Monitor from chartered surveyor e.surv found that higher loan-to-value (LTV) house purchase approvals made up 16.9% of house purchase approvals in February.
February was the third consecutive month of growth in higher LTV approvals and the largest proportion of total house purchase lending since September 2014. Lending to borrowers with a 15% deposit or less made up 15.3% of sales in January and 13.9% in December.
There were 10,298 higher LTV loans in February, 10.7% more than 9,300 in January.
The rise in high LTV loans can partly be put down to rising property prices. According to the latest First-Time Buyer Tracker from Your Move and Reeds Rains, first-time buyers paid an average of £160,304 for a property in January, 12% more than in January 2014.
Richard Sexton (pictured), director of e.surv chartered surveyors, described lending to lower-deposit borrowers as ‘back on track’.
“Higher LTV borrowers took a nosedive in October as a proportion of the market, after the introduction of loan-to-income caps became a challenge for first-time buyers,” he said, “But these buyers are evidently returning to the market to take advantage of low mortgage rates and cheaper Stamp Duty charges. And after the tricky bedding in phase that accompanied new mortgage legislation, first-time buyers are now once again accessing a market restructured for long-term viability.”
However, high LTV lending is safely below 2007 levels when smaller-deposit borrowers made up around a third of total lending.
Other figures from e.surv showed that total house purchase approvals grew for the third consecutive month, with 60,935 approvals, compared to 60,786 in January and 60,349 in December.
