Mortgage approvals jump in August as those with small deposits prosper

 
Oliver Gill
Follow Oliver
Yorkshire Prepares To welcome The First Stage Of The Tour De France
Yorkshire is the place to buy a house if you've only got a small deposit, according to figures released today (Source: Getty)

Mortgage approvals jumped by almost eight per cent in August with an increasing number of loans handed out to smaller deposit borrowers.

Lenders gave 66,145 loans the green light in last month, according to chartered surveyor e.surv.

And the proportion of those going to people with lower deposits continued to increase, swelling from 19.6 per cent in July to 20.3 per cent.

The mortgage approval rise comes as it was revealed today that London house prices had fallen for the first time in eight years.

“As the summer draws to a close, the UK mortgage market is in a much healthier position than a year ago. Approval rates are 7.8 per cent higher year-on-year and first-time buyers are taking more of the overall market," said e.surv director Richard Sexton.

“A year ago the market was dealing with reverberations of the Brexit vote, but the past 12 months have seen a strong recovery for the mortgage industry and the outlook for the future looks more settled.”

Read more: London house prices have fallen for the first time in eight years

Mid-market borrowers saw their share of lending squeezed. Large deposit borrowers, defined as those with a 60 per cent or more deposit, increased from 34.2 per cent to 34.4 per cent. Mid-market mortgage numbers fell from 46.2 per cent in July to 45.3 per cent.

Sexton said:

Those with large pots of cash or equity always find it easiest to get a mortgage application approved, as lenders are most eager to take their business. At the other end of the scale, government schemes and lender offers are helping more first-time buyers get onto the ladder.

If you only have a small deposit, Yorkshire is the place to be. Almost a third (32 per cent) of all loans in the region went to first-time buyers and others with smaller deposits this month. This compares with London, where only 12.6 per cent of borrowers had small deposits.

“While Yorkshire, the North West and Northern Ireland jostle for the top position, each region is a great place for first-time buyers to get onto the property ladder," said Sexton.

“Each of the three areas enjoy good quality housing stock in areas people want to live, plus prices are more in line with local wages - unlike many areas in southern England."

He continued:

This problem is most acute in London, where a large deposit is a vital for anyone trying to get onto the housing ladder for the first time.

Read more: UK mortgage lending is (almost) at its highest level since April 2008

Related articles