The latest mortgage monitor from e.surv showed there were 72,712 house purchase approvals in June, the largest number since January 2014. The number of approvals was 12.8% up on May and represented the largest month-on-month improvement since February 2009.
More borrowers with smaller deposits – 15% or less of their properties’ total value – made their way onto the ladder in June, 12,288 higher-loan-to-value (LTV) mortgages were approved in June, the highest figure seen in more than seven years. This was a 17.7% improvement on the 10,438 recorded in May and up 5.5% on the 11,646 seen in June 2014.
Higher LTV borrowers represented 16.9% of all house purchase approvals in June, increasing from 16.2% in May.
House purchase approvals have also risen significantly on an annual basis, with June seeing 10.5% more approvals than the 65,794 recorded 12 months ago.
Richard Sexton, director of e.surv chartered surveyors, said: “Potential borrowers clearly paused their actions whilst the election came and went. But now borrowers are back in the market for mortgages and demand is stronger than ever. Interest rates have remained at record lows with a dovish outlook from the Bank of England’s monetary policy committee, and we’re seeing a bevy of fixed-rate options as banks compete for buyers’ business.
“It’s a clear case of growing confidence spreading beyond those already securely on the property ladder. Higher LTV borrowers – typically first-time buyers – are still reaping the benefits from initiatives like Help to Buy,” he added.
“But this significant increase in lending to borrowers with smaller deposits goes deeper than the various plans in place to help this group. It’s a sign that the nation’s finances are getting back in order, with wage growth starting to mount and an economy ready to shake off the doldrums and get back to work. More people in better employment is making it easier for people to pull together deposits, even in the face of low interest rates, as people are able to move more from their pay-cheque into their housing piggy bank.”