Yorkshire market is first-time buyer hotspot

Michael Lloyd

April 13, 2018

The Yorkshire market is a hotspot for first-time buyers with one in three loans going to small deposits in that region, esurv’s Chartered Surveyors’ Mortgage Monitor found.

The North-South regional divide in the UK was seen once again in March, with buyers across the country facing varied mortgage and housing markets.

Some 30.3% of all approvals in Yorkshire went to first-time buyers and others with small deposits this month.

Richard Sexton, director at e.surv, said: “If you were a first-time buyer with the ability to live and work anywhere, the Yorkshire market would be the first place to start your house hunting.

“It is the only market in the UK which is more dominated by small deposit buyers than those with large deposits of cash.

“This is in stark contrast to London, where just 13% of all mortgages go to those with small deposits, versus a whopping 41.2% to those with large deposits.”

In Northern Ireland 29.4% of all loans went to this segment of the market while the North West rounded out the top three with 26.9%.

These three areas were the only to record more than 25% of loans going to small deposit buyers. Yorkshire was the sole region to have a greater proportion of small deposit borrowers than large deposit ones.

It saw 24% of its mortgages go to those with larger cash piles during March – the lowest ratio in the country.

London continues to be dominated by those with larger deposits with 41.2% of all loans this month going to those with big deposits compared to just 13% for small deposit borrowers.

Scotland was the market with the second biggest disparity, with 39% of loans going to large deposit buyers versus 17.1% for their small deposit counterparts.

Other areas which had a high proportion of large deposit buyers were the South East (38.6%), the South and South Wales (36.5%) and Eastern England 36.3%

London continues to be the toughest for those with smaller deposits. Across the UK there were 66,614 mortgages approved during March 2018, up 4.2% compared to February but down 1.3% year-on-year.

Sexton added: “We are seeing many existing homeowners – who tend to have more equity in their properties – looking to remortgage. This means a greater proportion of loans are being given to these borrowers than a month ago.”

Across the country some 19.6% of all mortgage approvals were to those with smaller deposits. While this figure is down on the 21.1% recorded last month, it remains higher than the most recent low in the market.

In December 2017, 18.2% of loans were to small deposit borrowers while in November this was just 17.2%.

The number of mortgages approved for borrowers with a large deposit increased substantially compared to a month ago.

These borrowers, defined by this survey as those with a deposit of 60% or more, made up 34.5% of the market in March 2018.

This is the highest ratio seen so far this year, more than the 33.1% recorded last month and the 33.5% back in January. This figure was last higher in December 2017, when 35.9% of all loans went to this part of the market.

With further speculation that the Bank of England base rate will rise again in the next few months, the summer months could see strong activity as more homeowners look to remortgage and secure a low rate.

Sexton said: “As talk of a further base rate increase continues to gather momentum, we are seeing many borrowers fix their rate and protect themselves against future rises.

“This has contributed to the growth in the mortgage market compared to last month. While the proportion of loans being given to first-time buyers has declined month on month, this month’s data shows the overall market is in a much stronger position than at the end of 2017.”

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