MortgagesJul 17 2018

Mortgage approvals rise throughout June

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Mortgage approvals rise throughout June

Property sales continued apace into June, with 66,435 mortgages being approved, 3 per cent more than in May, according to e.surv's latest mortgage monitor report.

Low and high value deposits are proving key drivers in the mortgage market. The money monitor report reveals that first time-buyers along with other buyers putting down small deposits, accounted for 23.4 per cent of approvals in June.

But the proportion of buyers laying down high value deposits of 60 per cent or more has also increased, and now makes up 32.9 per cent of approvals.

While approvals are on the rise, there are some regional differences that skew the overall picture.

The proportion of large deposit lending is highest in Northern Ireland, where it rose from 32.8 per cent in May to 39.8 per cent in June.

It is also high in the South East and London, despite marginal falls to 38 per cent and 38.5 per cent respectively.

Large deposit lending was lowest in Yorkshire and the North West, where sales have languished at 23.8 per cent and 28.7 per cent respectively.

London remains the toughest market to enter, with just 16.2 per cent of loans in the capital going to borrowers with small deposits, according to the report.

Richard Sexton, director at e.surv, believes concerns about interest rates may be one factor behind the increase in activity.

He said: "Mortgage approval rates are up both compared to last month and the same point a year ago, suggesting that lenders are offering deals which are tempting more borrowers to the market.

"Speculation about a potential base rate rise in August may increase interest, as more borrowers look to lock in a low mortgage rate before any increases take place."

Michelle Lawson, a mortgage broker with Lawson Financial, said: "We’ve not really noticed too much of a swing one way or another, for low or high value deposits, and with the summer holidays I can’t see that changing.

"As for interest rates, I think the British public are fairly resilient and will move when it suits them, rather than take too much notice of Bank of England interest rate forecasts."

dan.moore@ft.com