Despite the number of housing transactions decreasing in recent months, the number of mortgage approvals have increased, according to a survey from e.serv.
The survey compares the nation’s changing monthly mortgage approval figures and has found that 66,590 mortgages were approved for the month of July. This is a 1.5% hike from June’s figures.
Worryingly, the real increase in mortgage approvals was enjoyed by affluent borrowers with large deposits, those with at least a 60% deposit. Large deposit borrowers made up 33.8% of the overall mortgage market in July; this is a 0.9% increase from June.
Despite continuous help for first-time buyers, small deposit borrowers offered a mortgage reduced for July, with a market share of 22.1%; a 1.3% reduction from June.
In actual mortgage approvals 14,716 applicants with small deposits were offered a mortgage in July compared with 15,546 in June.
Richard Sexton, Director at e.surv, comments: “It is often thought that good weather causes a slowdown in the UK housing market, as would-be home buyers prefer to spend their time enjoying the sun.
“That thesis has been disproved this month, as the number of mortgage approvals increased month-on-month, despite the scorching weather across most of the UK.
“Those with more cash to splash took a bigger share of the mortgage market this month, yet there are still great opportunities for small deposit borrowers to get onto the ladder.
“While many look at the UK property market as a whole, it really is better viewed as a series of local markets, often with wildly differing characteristics.
“The London market is once again dominated by those with large deposits or high levels of equity in their existing home, while the North West has more first-time buyers and small deposit borrowers.
“In general, those areas closest to London require more sizeable deposits for borrowers to get onto the ladder while northern areas often see a greater number of first-time buyers.”
In a time when the housing market needs first-time buyers to reinvigorate a slow market and encourage the market to grow, a reduction in mortgage approvals to those with lower deposits could imply a slowdown for this section of the market.
Will an overall increase in mortgage approvals lead to an increase in conveyancing work? Does the reduction in small deposit borrowers suggest something more sinister for the conveyancing sector?