An increasing number of borrowers with small deposits are being approved for mortgages, a new report has revealed.
According to data released today by chartered surveyors, e.surv, nearly a quarter of mortgage borrowers in October were those with deposits of 15% or below – continuing a trend which has developed in the last few months.
Indeed, first-time buyers in general took up a larger share of this market than they did in the previous month.
Meanwhile the proportion of borrowers taking out home loans with large deposits of more than 60% or more was falling, according to e.surv.
Richard Sexton, director at e.surv, said: “Borrowers with smaller deposits, including many first-time buyers, saw their market share increase this month.
“This continues the broader market trend towards these borrowers and away from those with larger amounts of cash.”
Regions with the most small deposit borrowers
The region which saw the greatest number of loans being offered to those with small deposits was Yorkshire, where 33.7% of the market consisted of borrowers with small deposits.
However, the North West of England, Northern Ireland and the Midlands also had higher rates of borrowers with 15% or less saved for a deposit than their large deposit counterparts.
In London, however, the market was dominated by the largest number of borrowers with bigger deposits of 60% or more. Only 14% of the market had small deposits.
‘Fertile’ market
Richard Sexton, director at e.surv, said: “Whilst a decline in purchase activity in general has been evident since the summer, first-time buyers and others with smaller deposits will be delighted to see similar buyers dominating the market across many UK regions.
“Those in Northern Ireland, Yorkshire, the North West and the Midlands are all operating in a fertile market for small deposit borrowers.
“Even those people looking to buy in other regions have a better chance of obtaining finance getting on the ladder than previously, as the country-wide picture moves away from those with large deposits.”
