Wider market stabilises

Ryan Fowler

December 11, 2014

This uptick comes after a series of decreases in July (-1.1%), August (-2.9%), September (-4.4%) and October (-3.0%).

Though the proportion of higher LTV borrowers has decreased, the number of lower LTV borrowers has gone up.

There was a 5.2% increase in lower LTV borrowing from 18,184 home-purchase loans in October to 19,127 in November.

However, there were 14% fewer house purchase approvals in total compared to November 2013, when the volume of approvals sat at 71,050.

This is the largest annual decrease since December 2010. It also makes this November the third consecutive month in which house purchase approvals have fallen on an annual basis.

Richard Sexton, director of e.surv chartered surveyors, said: “The stabilisation of the market comes despite record lows in first-time buyers.

“A flurry of activity in lower LTV borrowing is allowing the market to stabilise despite record drops in higher LTV borrowers.

“This is a sign of a healthy market, fit to operate with an eye on the long-term. In 2009 we saw exactly what happens when an out-of-shape mortgage market starts sprinting.

“But the Mortgage Market Review and loan-to-income caps have put the market through the financial boot camp, and what we have now is a lean, capable market driven by borrowers who are able to see their loans through to the end.

“These figures display a market rebuilt for endurance, performing precisely as hoped.

“Looking ahead, the savings to buyers outlined in the Autumn Statement are expected to give 98% of the market a better deal on house purchases.

“This is a welcome policy indeed – rather than a government initiative which reactively attempts to prevent decline, we have an improvement that the market can really use in a sustainable fashion.”

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