Mortgage approvals hit a four year high in January thanks to a combination of falling mortgage rates, a wider range of mortgages available to borrowers, and an improvement in lender confidence, according to e.surv chartered surveyors.

e.surv’s latest Mortgage Monitor reveals mortgage approvals climbed 17% from 55,785 in December to 65,184 in January, making it the strongest month for house purchase lending since February 2008 – before the financial crisis. It also marked a 13% improvement on January last year. It is the strongest indication yet that the mortgage market is beginning to recover and regain some of its pre-2008 health.
The improvement in lending was driven by high LTV borrowers and first-time buyers, who accounted for the biggest overall share of the increase. Lending to borrowers with a deposit of less than 15% increased by 30% between December and January, reflecting a significant improvement in the availability and affordability of first-time buyer loans. 1 in 8 of all house purchase loans in January went to high LTV borrowers, the highest proportion since February last year (when first-time buyer numbers were artificially high thanks to the rush to beat the stamp duty deadline).
There were 7,758 loans to borrowers with a deposit of 15% or lower in January; the highest since February 2008. Lending to high LTV borrowers has been on a broadly upward trajectory since 2011. Throughout 2011, there was an average of just 4,808 high LTV per month. In 2012, that increased 13% to 5,325. And January saw an even greater rise of 30%, suggesting this year will see further improvements in conditions for first-time buyers.

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