According to e.surv, Chartered Surveyors, first time buyers have been hit by a further tightening in lending criteria, this has left fewer first time buyers achieving that first rung of the property ladder in May.
Approvals for homes valued at £125,000 or under only accounted for 23 per cent of all approvals for May, the average for the last year was 24 percent.
Those buyers able to purchase in the higher price brackets have been less affected by the lending criteria because they don’t need the higher LTV products that the first time buyers need.
Whilst mortgage volumes seem to have recovered slightly, year on year figures show that volumes are still down.
A recent decision to keep the Bank of England base rate down should, in theory, help the first time buyers but with lenders tightening their criteria fewer lower income buyers have been able to secure a mortgage and purchase volumes where the LTV is at 90/100 per cent struggled to grow at even half the pace of the overall market.
Richard Sexton, Business Development Director of e.surv commented:
“With base rate hikes seemingly off the agenda for at least another six months, it’s great timing for homeowners and buyers to benefit from falling mortgage rates. Those with the least equity in their homes need cheaper rates most, so it’s important lenders don’t make it too difficult to qualify for the best mortgages. Tightening criteria in May are going against this grain. Some lenders are ahead of the pack and are offering good deals, but for others it’s not enough just to advertise a good headline rate.”
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