A prolonged period of low rates and stagnant house price growth has helped boost the number of mortgages approved to buyers with small deposits, e.surv’s Mortgage Monitor has showed.
There were 66,059 residential mortgages approved in August which is a monthly decrease of 1.9% but yearly increase of 0.1%.
Richard Sexton, director at e.surv, said: “While mortgage rates have ticked up in the last couple of years, more recently deals have started to become cheaper.
“SWAP rates, which are used by lenders to help price mortgage rates, have fallen, with lenders passing on these lower funding costs to consumers.
“The outcome has been a new wave of cut-price deals, which have tempted homeowners and first-time buyers to market.”
While some parts of the market have slowed, the number of first-time buyers has reportedly remained buoyant in the last 12 months.
Small deposit borrowers grew their market share from 27.9% in July to 28.3% in August.
Low rates helped the proportion of approvals given to large deposit borrowers stay at 26.6% of the overall market.
These changes meant that the mid-market shrank slightly in August, falling to 45.1%.
Sexton added: “The rise in the number of small deposit customers shows the property market is starting to tilt in favour of first-time buyers and others unable to pull together large deposits.
“The number of mortgage schemes to help first-time buyers has also given then a timely boost.”
Yorkshire remained the best place to buy for those with small deposits as 35.4% of all loans in the region went to borrowers with small deposits.
London borrowers continued to have the most difficult time, with just 19.4% of all loans in the capital being given to small deposit applicants.
The city also had the highest proportion of loans approved to large deposit borrowers, recording 34.6% in August.
Sexton commented: “Whilst Yorkshire has continued to lead the way as the small deposit borrower hotspot, other regions are proving equally attractive to first-time buyers.
“The North West and Northern Ireland have both proven to be excellent places for people to buy if they have little cash to spare.
“Those in London and the South East have less opportunity but with prices slowing the most in these areas, there are still great chances for first-time buyers to get onto the ladder.”