Date Published 15 July 2011
Purchase approvals rose 6.7% in June, in part as lenders increased activity to meet planned half-year lending targets.
Approvals on all property over £125,000 increased as those buying property over £125,000, typically on higher incomes, were able to secure mortgages.
Purchase approvals with LTVs over 85% rose in June to 9.4%, up from 8.3% thanks to the wider availability of high LTV products (for comparison, this is still well down on 2008 when approvals with LTVs over 85% accounted for 20.2% of all approvals). Overall lending conditions remained static, with the average LTV steady at 60.4%, as a consequence of an increase in lower LTV lending to wealthier buyers, which offset the very slight increase in the uptake of high LTV products.
On a regional basis, the South saw a greater increase in purchase approvals than the North. Approvals for house purchase in London increased 12.3% in June, and 6.9% in the South-East. By contrast, activity in the North was slower, particularly in Scotland where purchase approvals fell 1.4%, while activity was also relatively subdued in Cumbria and the North-East, where approvals increased by only 2.8%.
Richard Sexton, business development director of e.surv said:
'There has been a great deal of recent chatter about 95% LTV products hitting the market, but if you delve beyond the headline loan-to-value ratio it is clear criteria remain too restrictive for the majority of lower income buyers. With average rents now at £696 according to LSL, buying is undoubtedly the cheaper long term option, so there is greater incentive than ever for potential buyers to roll up their sleeves and piece together a deposit if they can.'