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Increase in small deposit borrowers boosts lending figures

According to the latest mortgage monitor by e.surv, home loan approvals increased by 7% in July this year, due to the higher number of borrowers applying for a mortgage with a small deposit.

In July, there were 66,083 loans approved by lenders, an increase on June’s figure of 65,887. The figure was 6.7% higher than last year’s approvals, according to the report. The figure includes a greater number of buyers with a small deposit, which includes a large number of first-time buyers. Approvals for this group rose from 18.5% last year to 19.6%. However, the figure was still lower than the peak period in April, when approvals for low-deposit buyers reached 21.5%.

These figures are in contrast to those provided by National Association of Estate Agents Propertymark report, which indicated that first-time buyer sales fell by almost a third. The director of e.surv, Richard Sexton, believes that this increase in approvals for small deposit borrowers may be due to the availability of government help to buy schemes and historically low rate deals.

However, for buyers in London, the picture was slightly different as small deposit buyers still face a struggle to get onto the housing ladder. The number of approvals to those with a small deposit fell from 14.3% in June to July’s figure of 8.3%.

Those with a small deposit may wish to seek advice from a professional, such as a CeMAP qualified mortgage advisor, who has gained experience in this area of the mortgage market.

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