June approvals hit 17-month high
House purchase approvals increased by 12.8% from 64,434 in May 2015, while on an annual basis there were 10.5% more approvals in June.
Richard Sexton, director of e.surv chartered surveyors, said: “This is the summer comeback we’ve been waiting for.
“MMR has already tightened up the nuts and bolts, and lenders are now putting hands on deck to make sure they’re shipshape for the EU Mortgage Credit Directive peeking over next year’s horizon.
“More positivity among buyers and lenders alike means the market is now on a stable course of sustainable lending.”
High loan-to-value borrowing performed strongly, as there were 12,288 approvals at 85% LTV plus in June, a 17.7% rise on the 10,438 recorded in May and a 5.5% increase on the 11,646 seen in June last year.
Higher LTV borrowers also represented 16.9% of all house purchase approvals in June, increasing from 16.2% in May.
Sexton said: “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.
“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.”
Yorkshire was the region with the largest proportion of higher LTV house purchase loan approvals, although the proportion didn’t shift from the previous month.
The North West could be set to overtake Yorkshire as the new home for first-time buyers, as it displays a strong month-on-month increase in this category of lending. Higher LTV lending comprised 25% of all North Western house purchase approvals in June compared to 23% in May.