Mid-market thrives as fewer low and high-deposit buyers get mortgages

Mid-market thrives as fewer low and high-deposit buyers get mortgages [Photo: PRImageFactory via iStock]

The mid-market has taken a new position of prominence in the UK's mortgage sector, a new report shows, as the numbers of people getting onto the property ladder with small and large deposits show significant declines. 

Data published by e.surv chartered surveyors into the UK's property market shows that both the markets for those with deposits of more than 60 per cent and those with below 20 per cent fell in May this year. However, the latter does still continue to sit at levels far ahead of those seen in 2016. 
The survey shows that the proportion of people getting onto the property ladder with a high deposit represented some 33.9 per cent of all mortgage loans. This is a significant fall from the 34.6 per cent recorded in January, and markedly down on the start of the year, where these buyers accounted for 35.4 per cent of the sector. 
At the same time, the proportion of the market held by small-deposit buyers has fallen. According to e.surv, these buyers accounted for only 21.3 per cent of overall mortgage lending, compared to the 21.5 per cent recorded in April. 
This means, e.surv said, that the market in May was being dominated by the mid-market, with buyers more commonly coming to buy homes with a deposit of between 25 per cent and 50 per cent typically. e.surv said this suggests increasing movement up the ladder by those who have previously owned their home.
"This can also be viewed as a positive for young buyers. As mid-market borrowers move up the ladder and into bigger properties, this frees up stock for buyers looking to get onto the ladder for the first time," said Richard Sexton, director of e.surv.
Further good news for new buyers - typically those coming to market with a smaller deposit - is that even though May represented a falling proportion of mortgage lending for their demographic, it is still up markedly compared to last year. The 21.3 per cent of the market commanded in May remains well ahead of the 16 per cent recorded in December 2016, showing that young buyers have been able to borrow more in 2017 than they have in the recent past.