Deposits reach post-recession peak
This represents a 4% increase from the £69,200 recorded in May last year. As house prices rise the typical loan has also risen by 4% from £161,900 in May 2014 to £167,800 last month.
Brian Murphy, head of lending at Mortgage Advice Bureau, said: “Putting up a 30% deposit helps to unlock some of the best rates on the market and helps keep mortgage payments even more affordable.
“The rise of deposits is less encouraging for first-time buyers, but there is at least some hope that more low cost properties will become available as second- and third-steppers make their move up the ladder.
“The range of affordable schemes to support first-time buyers will soon be boosted by the arrival of the Help to Buy ISA.
“All the same, the savings scheme will not be enough on its own to solve the long-term issues that are driving up prices and deposits across the market.”
The average loan-to-value peaked at 72% in March 2014 before the Mortgage Market Review rules took effect a month later on April 26, while last month typical LTVs dropped to 70% LTV.
After the MMR came into force the average loan taken out fell for four consecutive months from £165,500 in June 2014 to £158,800 in October 2014.
House purchase application volumes increased by 14% year-on-year in May 2015, while the volume of remortgage applications – although smaller as a percentage of total activity (28%) – grew by 41% year-on-year.
Murphy added: “The housing and mortgage markets certainly felt an impact from successive changes to mortgage lending criteria last year.
“However, the rise in applications and increasing loan size prove that it is still possible for consumers to pass the necessary checks and get the support they need to make their house purchase a reality.”