News

Research from e.surv showed properties under £125,000 accounted for 27% of all mortgage approvals in April compared to only 20% in April 2010 and a twelve month average of 23.8%.

A year ago wealthier buyers represented a disproportionate share of the market. That has now begun to correct. In April 79% of all approvals were for homes under £250,000 - typical first-time buyer property. This is up from 71% in April 2010.

Lenders are beginning to loosen their criteria, which has helped more first-time buyers qualify for high LTVs. More high LTV mortgages are being offered, with the proportion of mortgage approvals in the high LTV brackets rising significantly compared to October 2010. Purchase volumes increased in the 85% to 90% LTV bracket at almost three times the pace of the rest of the market.

Commenting, Richard Sexton, business development director of e.surv said: "More first-time buyers are getting onto the property ladder as they look to escape the record cost of renting and take advantage of loosening lending criteria. They are realising that with renting so expensive home-ownership is the more attractive option, especially with lenders now keener to offer fixed rate deals.

"Lenders are looking to bring in new business after a remarkably sluggish winter period. They have tentatively offered high LTV products for some time, although their criteria have been so tight that few borrowers qualified. This is slowly starting to change. First time buyers are the lifeblood of the market - their purchases unlock the rest of the property chain - so these signs of life at the bottom of the market will be welcomed by the higher echelons of the property ladder.

"Yes, springtime is a traditionally vibrant period for the market, but the steady increase of approvals since January, especially at the lower end of the property chain, suggests the mortgage market is moving slowly in the right direction. It will be a hard slog, but the portents bode well."

Source: mortgage Introducer 13/05/2011