First-time buyers and high loan-to-value borrowers drove mortgage approvals to a four year high in January, according to E.surv.
Lending to borrowers with a deposit of less than 15% increased by nearly a third between December and January, while one in eight of all house purchase loans last month went to high LTV borrowers, the chartered surveyors firm found. House purchase loans as a whole increased by 17% to 65,194 – the best month since 2008.
E.surv business development director Richard Sexton said: “After an inauspicious start last autumn, Funding for Lending has come good. It has flooded lenders’ balance sheets with cheaper funds, which has encouraged them to reduce mortgage rates to record lows and roll out a much wider range of mortgages for high loan-to-value borrowers. It is helping clear the logjam in the first-time buyer market.
“The hope now is that January isn’t just a flash in the pan. There are plenty of reasons to believe it won’t be. Funding is cheaper. Borrower finances are better. And the Eurozone crisis lies dormant. All of this bodes well for the rest of the year.”
Loans to borrowers with a deposit of 15% or lower in January totalled 7,758, compared to an average of 5,325 throughout 2012. There were 14,995 loans on properties worth less than £125,000.
Since the Funding for Lending Scheme launched, lenders have introduced more than 300 new house purchase mortgages.
Ashley Law managing director Jock Cassidy said high LTV products helped those looking to acquire property: “Lenders are coming through with more attractive products in terms of the capability of borrowers to achieve the mortgage they are looking for.”