Lending to high LTV borrowers reached a six-year high in February, the highest monthly number since April 2008, a report reveals.
Monthly high LTV loans topped 11,000 for the first time in six years, a rise of 74 per cent, according to the latest Mortgage Monitor from e.surv, the UK’s largest chartered surveyor.
Just over a sixth of all house purchase loans in February were to borrowers with a deposit worth 15 per cent or less of the total value of their property.
February saw 11,138 high LTV loans given out, a six per cent rise from January, despite the overall number of home loans falling over the same period, with the average LTV climbing to 63.5 per cent as a result, its highest level since 2007.
Regionally, high LTV loans made up 25 per cent of February home loans in the North East & Cumbria, 24 per cent in the North West, which was the same in Yorkshire, with just 6 per cent being in London.
House purchase lending also rose by 37 per cent year-on-year in February and was the strongest February month for house purchase lending since the financial crisis.
On a monthly basis, however, numbers show that house purchase approvals fell by 7.2 per cent from January’s number, which is partly due to adverse weather conditions discouraging movers in the short term.
Richard Sexton, director of e.surv chartered surveyors, explains: “A bumper crop of high LTV deals is tempting more buyers back to the market.
“The countdown to the introduction of MMR regulations has begun. The new rules will demand rigorous stress testing of buyers, which could further tighter regulation, and could make it more difficult to get on the ladder. We are seeing both banks and buyers pushing ahead with lending ahead of this cut-off.”
e.surv analyses detailed data on over one million mortgage valuations the firm carried out between August 2006 to the present, which are analysed each month and the trends used to extrapolate from the Bank of England’s mortgage data.
