First-time buyers contributing to bigger share of the UK's mortgage market

 
First-time buyers contributing to bigger share of the UK's mortgage market [Photo: eskaylim via iStock]

The number of first-time buyers getting themselves onto the housing ladder in the UK appears to be on the rise, according to new data, which shows a rise in the volume of buyers with a small deposit being approved for mortgages. 

Those who come to mortgage lenders with a small deposit are typically buyers who are making their first foray into the housing market. And according to the latest report from residential chartered surveyors e.surv, the volume of approvals for buyers with a small deposit rose to 19.6 per cent of the market in July.

It marked an impressive rise from the 18.5 per cent that was recorded in June, according to the data, as the overall volume of mortgage approvals rose by 6.7 per cent year on year. It shows a marked rise in market activity when compared to a year ago, when the number of buyers fell dramatically in the aftermath of the Brexit vote. 

"The mortgage market is in a much happier place than 12 months ago when, in the aftermath of the UK’s vote to leave the European Union, activity had stalled as buyers and sellers took a pause for breath. One year on and we have seen approval levels bounce back," said Richard Sexton, director of e.surv.

However, even though there has been a rise in the proportion of the market commanded by small deposit buyers, the fact still remains that it has seen a drop compared to earlier in the year. The peak for 2017 was in April, when more than 21 per cent of the market for mortgages was commanded by newcomers. 

These buyers still fared better than those with large deposits of more than 60 per cent of the value of their home, however. According to the data, in the year so far, those coming to the market with a large deposit are seeing their proportion of the market stagnate somewhat.