Mortgage approvals for house purchase rose 6.7% in June, as lenders rushed to meet their half-year lending targets.
But first-time buyers suffered, as lenders continued to prefer wealthier buyers.
The claim is made this morning by e-surv, the surveying and valuations business of LSL, which is also parent group of estate agency chains Your Move and Reeds Rains.
But e-surv said that lending criteria remain tight at the bottom of the market, and June was the worst month this year for first-time buyers, with low levels of approvals on the cheapest properties.
Approvals for homes under £125,000 – typical first-time buyer properties – accounted for only 22% of total approvals in June, down from 23% in May, and the lowest level since November 2010. This contrasts with early 2008 when purchases of the cheapest property accounted for 30% of all approvals.
Approvals overall rose fastest in London, where there was a 12.3% increase, reinforcing the capital’s increasing disconnect from the rest of the UK market.
The upsurge in London activity did include an increase in the number of first-time buyers.
Although first-timer numbers fell nationally, approvals for properties up to £250,000 – typical first-timer property in the capital – accounted for 43% of all approvals in June, up from 40% in May. However, this is still well below the figure for June 2009, when 50% of all London mortgage approvals were for typical first-timer property.
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.”
He went on: “Lenders are stuck between the devil and the deep blue sea.
“On the one hand, they are bound by tighter regulatory standards and a commitment to improve their capital, while on the other they are being put under political pressure to offer more appropriate mortgage products to match the financial situations of consumers.
“They cannot do both: these contrasting pressures are entirely incompatible bedfellows.
“Lenders still have to deal with significant risks to their balance sheets so, after a concerted effort to meet lending targets for the first half of the year, the next few months could see a return to a lower level of activity as they ration funds cautiously in the third quarter.”
But first-time buyers suffered, as lenders continued to prefer wealthier buyers.
The claim is made this morning by e-surv, the surveying and valuations business of LSL, which is also parent group of estate agency chains Your Move and Reeds Rains.
But e-surv said that lending criteria remain tight at the bottom of the market, and June was the worst month this year for first-time buyers, with low levels of approvals on the cheapest properties.
Approvals for homes under £125,000 – typical first-time buyer properties – accounted for only 22% of total approvals in June, down from 23% in May, and the lowest level since November 2010. This contrasts with early 2008 when purchases of the cheapest property accounted for 30% of all approvals.
Approvals overall rose fastest in London, where there was a 12.3% increase, reinforcing the capital’s increasing disconnect from the rest of the UK market.
The upsurge in London activity did include an increase in the number of first-time buyers.
Although first-timer numbers fell nationally, approvals for properties up to £250,000 – typical first-timer property in the capital – accounted for 43% of all approvals in June, up from 40% in May. However, this is still well below the figure for June 2009, when 50% of all London mortgage approvals were for typical first-timer property.
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.”
He went on: “Lenders are stuck between the devil and the deep blue sea.
“On the one hand, they are bound by tighter regulatory standards and a commitment to improve their capital, while on the other they are being put under political pressure to offer more appropriate mortgage products to match the financial situations of consumers.
“They cannot do both: these contrasting pressures are entirely incompatible bedfellows.
“Lenders still have to deal with significant risks to their balance sheets so, after a concerted effort to meet lending targets for the first half of the year, the next few months could see a return to a lower level of activity as they ration funds cautiously in the third quarter.”
No comments:
Post a Comment