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Small deposit lending jumps to highest level since 2008

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  • 08/10/2015
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Small deposit lending jumps to highest level since 2008
Lending to borrowers with small deposits soared to reach 18.1% of all purchase approvals in September, the highest proportion recorded since October 2008.

According to e.surv’s latest mortgage monitor, lending to buyers with a deposit worth 15% or less of their properties’ total value reached 13,200 in September, up 7.4% on last month’s total lending and 22.5% higher than the same time last year.

Regionally, the South, South East and South Wales all improved their support for small deposit borrowers in September, while Yorkshire represented the best region for high loan-to-value lending, with 29% of all house purchase lending made up of small deposit loans.

Overall, e.surv’s findings showed that house purchase approvals increased to the highest level since January 2014, which was also the last month of support for the Bank of England’s Funding for Lending Scheme.

House purchase approvals totalled 72,930 in September, up by almost 20% since the same time last year.

Richard Sexton, director of e.surv chartered surveyors, said the findings indicated that confidence in the UK housing market was continuing to grow.

“It’s not just lenders who have been affected by a calmer financial outlook  in recent months, prospective mortgage borrowers have seen their potential savings bolstered by low inflation rates and a recovering economic climate,” he said.

“Comparisons with the previous high in January 2014 underscore this point. Today’s progress isn’t the result of a final gasp of artificial support from the likes of Funding for Lending – but represents seven years of gradual rebuilding and consolidation by mortgage lenders.”

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