House purchase lending increased for the eighth month in a row in October, reaching the highest level in nearly six years, according to the latest Mortgage Monitor from e.surv.
There were 68,996 house purchase loans in October, as approvals rose 3% from 66,735 in the previous month, pushing figures to a new post-financial-crisis record. Compared to October last year, approvals were 32% higher, equal to 17,000 more approvals. Compared to in January 2013, approvals have risen 27%.
The sustained recovery in lending has been driven further forward by the increasing number of loans that are being approved to buyers with smaller deposits. In October, there were 9,176 loans to borrowers with a deposit of 15% or less of the total value of the property, an increase of 15% to September 2013, and an 80% increase year-on-year. This represents the highest number of high LTV loans since April 2008.
But despite the increase in high LTV lending, the number of affordable properties is decreasing as house prices are being pushed up by a supply shortage.in some areas. There were just 13,799 loans on properties up to the value of £125,000 in October – typical first-time buyer stock – but this was 6% lower than in September.
Richard Sexton, director of e.surv chartered surveyors, explains:
“The mortgage market is bustling with activity, as further buyers migrate back to the market. Winter may be approaching, but that’s not dampening the spirits of potential homeowners, who are moving house, or buying into property in their droves. The sense of economic positivity, arising from rising house prices, falling unemployment and increased lender confidence is catching on like the common cold, and more people are looking to move. It’s a merry-weather market, with positive sentiment to match the season.
Integrity IFA – Free Mortgage Advice in Edinburgh.