First-Time Buyer Mortgages Decrease In February

According to the latest mortgage report from e.surv, in the month to February the number of loans approved has increased by 3.8%.

Although the mortgage market continued to grow in February, there are indications that political uncertainty is having an affect on confidence in purchasing property at this moment in time.

The report found that there was a clear reduction in those choosing to enter the market for the first time. 26.3% of the total number of loans accepted in February were offered to first-time buyers or buyers with smaller deposits. This constitutes a decrease of 0.7% from the 27.1% market share this group enjoyed in January.

On an absolute basis, FTBs that were offered mortgages with smaller deposits fell from 17,981 accepted mortgages in January to 17,480 in February.

Potential buyers that have saved substantial deposits for a home have also been deterred from purchasing property in February with a sector share of 28.1% falling to 26.9%. This section of mortgage approvals has also fallen by more than 3% since December.

Mid-deposit savers have ensured mortgage approvals remain positive in February as they enjoyed a 2% rise from 44.8% in January to 46.8% in February.

Richard Sexton, director of e.surv said: “While confidence has fallen in the housing market due to economic and political turbulence, the mortgage market continues to grow. Existing home owners are able to lock into cheap fixed rate deals while first time buyers are being helped by more generous criteria being offered by banks and building societies.

“Raising a deposit remains a challenge for young borrowers, but there are more products being launched which are targeting those with little cash to spare.

“The slowdown in house price rises in London has been a welcome relief for first time buyers, as properties slowly become more affordable. However, those looking to buy in the capital city still have a significantly harder job than those in other regions, given prices are still very high. If borrowers have the ability to work from anywhere, affordability is much better in northern areas and Northern Ireland.”

Do the recent mortgage approvals suggest that the property market is more buoyant than expected? Or, does the reduced number of FTBs applying or being accepted for mortgage finance suggest the market is struggling?

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