New figures show that mortgage approvals have risen to a 15 month high, giving some hope that the bottom of the housing slump has been reached.
New figures from e.Surv show that mortgage approvals in August were at their highest level since May 2010; approvals rose, on a seasonally adjusted basis, from 49,239 in July to 49.566 in August.
Hope for first time buyers
More than 10% of the mortgages approved in August went to buyers with a 15% deposit or less, giving hope to those people with smaller deposits, particularly first time buyers, that mortgage lending criteria is easing.
Further evidence that the housing market may be getting a little easier for first time buyers, can be found in the purchase price of the properties on which the mortgages were approved. 24% of all mortgages approved in August were for purchase prices of £125,000 or less, typical first time buyer territory.
The past week has also seen the launch of the first 100% mortgage since the credit crunch. The Family Guarantee Mortgage by Aldermore allows up to 100% of the value of the property to be borrowed, providing a family member is willing to guarantee the amount above 75%.
There seems to be a number of signs that things may be getting easier for first time buyers, who have been hit particularly hard by the ongoing affects of the credit crunch. However, Richard Sexton, from e.Surv, warned that buyers “should not get carried away” believing that the problems with mortgage availability had come to an end.
He continued: “A slight loosening in criteria only makes a small dent in the vast backlog of buyers stuck in the rental market.”
Experts believe that it is good news higher loan to value lending is increasing as it will help first time buyers and those people affected by negative equity to enter or indeed re enter the housing market. However, lenders will need to lend more responsibly and learn the lessons of the credit crunch if the same mistakes are not to be repeated in the future.