"May was a month for the mid-market borrowers as large and small deposit buyers saw their share of the market fall"
According to the data, this is the lowest ratio seen so far in 2017, well below the 35.4% recorded in January.
However, borrowers with small deposits saw their share of the market sip slightly from 21.5% to 21.3% month-on-month, with mid-market borrowers benefiting from other shrinking parts of the market. After four successive months of growth, small deposit buyers saw their overall share of the UK mortgage market fall back in May. These buyers took 21.3% of the market this month, down on the 21.5% recorded during April but still high compared to the recent past.
Yet as recently as December 2016, small deposit buyers represented just 16.1% of the market.
The overall size of the mortgage market grew month-on-month but remained smaller than it was in May 2016. There were 64,645 loans (seasonally adjusted) approved this month, 1.1% higher than in April 2017 but 3.2% down on the same month a year ago,
The North West of England was home to more small deposit borrowers than any other part of the UK during May 2017. In this region buyers with small deposits made up 31.1% of the total market, some distance ahead of the other areas surveyed.
Yorkshire (29.5%), Northern Ireland (26.3%) and the Midlands (25.5%) were the only other areas surveyed to see more than a quarter of loans go to first-time buyers and others with small deposits.
The region most dominated by buyers with large amounts of cash was Scotland. Here 39.4% of all loans were made to this type of customer - higher than anywhere else surveyed.
London, Northern Ireland (both 38%) and the South East (37.5%) had the next biggest reliance on buyers with large deposits.
Richard Sexton, director of e.surv chartered surveyors, commented: “May was a month for the mid-market borrowers as large and small deposit buyers saw their share of the market fall. But this can also be viewed as a positive for young buyers. As mid-market borrowers move up the ladder and into bigger properties, this frees up stock for buyers looking to get onto the ladder for the first time.
While the number of small deposit borrowers has fallen between April and May, the market still remains much bigger than it was at the turn of the year. Low mortgage rates and government schemes are helping more buyers onto the ladder and we are seeing this happen in greater numbers than it was at the end of 2016.
We are also detecting an apparent shift in the geographical distribution of lending overall - with London and the South East growing quieter, and areas North of Birmingham showing growth in applications.”
