Modest approval count in July – e.surv
This July’s mortgage approval count fell by 4.9% year-on-year to stand at 65,907, the latest Mortgage Monitor from e.surv chartered surveyor has revealed.
There were far more approvals in January and February, at 73,060 and 72,512, when there was a rush to buy before the 3% stamp duty surcharge came into force in April.
Richard Sexton, director of e.surv, said: “Whilst summer transactions levels have softened slightly, this can largely be attributed to the markedly high transaction rate earlier this year and the expected summer lull.
“The immediate aftermath of the vote on June 23 saw lenders and borrowers act with caution, but subsequent policy decisions have been made to restore confidence to the market.
“Mark Carney and the Bank of England reduced the base rate to a historic low of 0.25% at the start of August and announced a support programme to help pass this rate cut onto borrowers.
“The impact of these measures will be seen in future months, but should provide assurance for both borrowers and lenders alike.”
Borrowers with a deposit of less than 15% accounted for 18.3% of the market, down from 19.1% in April, while those with a deposit of 60% or more accounted for 33.2% of loans in July.
e.surv suggested that the North West is the best place for first-time buyers, where 27% of loans were with a deposit of less than 15%. Similarly in Yorkshire (26.8%) and Northern Ireland (23.7%) small loans made up a higher proportion of the market.
Sexton added: “First-time buyers and those with small deposits will hope that the Bank of England’s base rate cut and funding programmes increase the amount of products on the market due to increased competition between lenders.
“First-time buyers remain the lifeblood of the housing market, but the difficulty of saving for a deposit and lenders’ preference for high LTV lending continue to be problematic for these borrowers. Changes to the stamp duty regime gave some respite to new buyers by reducing demand for properties. Annual house price increases have also slowed, which should help new buyers.
“As always, the real issue remains on the supply side of the market. While house building is increasing, the country remains well behind where we need to be in terms of building new homes. An increase in the number of new homes would benefit both first-time buyers and the wider market, allowing chains to move more easily and inject new life into the market.”