Small deposit borrowers increasing mortgage market share

Borrowers with small deposits are making up an increasing proportion of the mortgage market, research suggests.

The February Mortgage Monitor from surveyors e.surv showed small deposit buyers, those putting up to 15% down on a property, made up 20.5% of the market in February, up from 15.7% a year ago.

In January these borrowers took 18.7% of the mortgage market, according to the e.surv research.

On an absolute basis there were 13,717 applications approved for small deposit buyers in February 2017, up from 12,609 recorded in January 2017 and 10,878 in December 2016.

However, bigger deposit borrowers, those with 60% equity or more, continue to make up a bigger proportion of the market at 34.7%, which is actually down from 35.4% a month before.

Richard Sexton, director of e.surv chartered surveyors, said: “Buyers with smaller deposits are growing in number as more people get themselves on to the property ladder.

“The new year started in a positive fashion and this trend has continued into February. This may be because mortgage lenders are now more receptive to first-time buyers, but also could be the number of Government housing schemes helping people save for their deposit to buy a home.

“Despite this positive performance, the market for first-time buyers and those with small deposits still needs support. These buyers are the key to housing chains, allowing others to sell on and move up the ladder.

“It will be interesting to see what trends develop as the year progresses.”


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