August sees 5% rise in purchase approvals
The latest analysis from e.surv has revealed the first signs of post-referendum recovery for the UK mortgage market as approvals gained 5% on during August.
According to the data, during August there were 63,972 house purchase mortgage approvals – suggesting the market is quickly growing following the post-referendum lull.
Despite the rise, this figure remains 10.3% lower when compared to the same period last year.
The number of house purchase approvals was also down on the levels seen earlier this year, however e.surv notes that February’s peak of 72,512 was artificially boosted by buyers making purchases ahead of the stamp duty tax changes in April.
e.surv added that the recent “flux in the market” has actually benefited borrowers with smaller deposits. 18.6% of all loans were made to borrowers with an LTV of 85% or higher which is “significantly above” the 17.3% seen in August 2015.
Richard Sexton, director of e.surv chartered surveyors, commented: “Despite the number of approvals being lower than a year ago, positive signs are already emerging in this post-referendum mortgage market.
The policy announcements made in the aftermath of the vote look to have calmed the nerves of borrowers and lenders alike. Thanks to this, we have seen the market grow by 5% between July and August.
The decision made by the Bank of England’s Monetary Policy Committee to lower the base rate to 0.25% has also boosted the prospects of mortgage borrowers. This survey has caught the initial impact of the rate cut, however the full effect of the decision will be seen in the coming months.”
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