House purchase approvals dipped by 0.8 per cent in the 12 months to September, despite a monthly rise of 2 per cent, data from E.surv’s mortgage monitor revealed.
Overall, there were 65,469 house purchase approvals in September, compared to 64,212 in the previous month.
The figures mark the first month of house purchase approvals growth since June 2014, following monthly declines of -1.2 per cent in July and -2.9 per cent in August, which were caused by a dip in demand over the holiday season, E.surv said.
However, despite the slight pick up in house purchase approvals over September, compared with recent months, on an annual basis they dipped by 1.8 per cent.
Richard Sexton, director of E.surv chartered surveyors, said: “The purchase mortgage market is putting the recent regulatory changes into the rear view mirror as we move into autumn.
“Approvals declined over the summer, as demand dropped off over holiday season, and the changes introduced in the Mortgage Market Review also took a few months to settle down. But looking ahead, the road looks steady.
“We are still a way off where we should be, but there are reasons to be optimistic.”
Elsewhere, higher loan-to-value lending doubled in September, up 44.8 per cent compared with the figure last year.
September marked the twentieth consecutive month of annual higher LTV growth and annual growth for higher LTV loans. Higher LTV approvals have now risen 12 per cent since the start of the year.
Mr Sexton said: “First-time buyers are the backbone of the UK’s mortgage market and the foundation on which the mortgage market’s post-recession recovery has been built.
“But after an extended period of flat wages, low interest rates and high inflation, many of them are still struggling to save for a deposit. Help to Buy has provided a route around that barrier. A long term commitment to Help to Buy, complimented by more new housing supply, will help keep first-time buyers in the ring; but further regulation is fast approaching.
“The Bank of England’s new loan-to-income caps are set to come into full force at the beginning of October. They could rule a host of borrowers back out of the market, despite the best efforts of Help to Buy to keep it wide open. Prudence and opportunity must be balanced.”
ruth.gillbe@ft.com
