Strong mortgage performance continues into June

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1 Strong mortgage performance continues into June - Approval levels improve on stellar May - Greater proportion of loans go to small deposit borrowers - First-time buyers enjoy greatest success in Yorkshire The stable performance of the UK mortgage market during May continued into June, with buyers across the country achieving their dream of home ownership in increasing numbers. Yorkshire was the top location for small deposit borrowers, with 33.7% of all loans going to these customers. In London this figure was just 16.2%. The latest Mortgage Monitor from e.surv, the UK s largest residential chartered surveyors, found that there were 66,435 mortgages approved in the month (seasonally adjusted). This is 3% higher than in May, and builds on the growth seen a month ago. First-time buyers continued to be among the main beneficiaries, with these and other buyers with small deposits taking a greater share of the overall mortgage market than a month ago. The Mortgage Monitor found that 23.4% of the total UK mortgage market went to this type of borrower during June. This is higher than the 22.4% recorded in May and continues a recent trajectory which has seen small deposit borrowers increase their share of the market. The Bank of England chose to keep the base rate at 0.5% in June, although speculation is increasing about a potential rise in August. The central bank will consider a range of factors before the next meeting of its Monetary Policy Committee, including the potential impact on mortgage borrowers a rise in interest rates would have on mortgage borrowers. Richard Sexton, Director at e.surv, comments: While the housing market appears to have plateaued in some areas, there was good news for those looking to borrow to fund a house purchase. Mortgage approval rates are up both compared to last month and the same point a year ago, suggesting that lenders are offering deals which are tempting more borrowers to the market. Regional disparities continued this month, with wouldbe buyers in different areas of the country having to contend with wildly different housing markets. Speculation about a potential base rate rise in August may increase interest, as more borrowers look to lock in a low mortgage rate before any increases take place.

2 31/01/ /04/ /07/ /10/ /01/ /04/ /07/ /10/ /01/ /04/ /07/ /10/ /01/ /04/ /07/ /10/ /01/ /04/ /07/ /10/ /01/ /04/ /07/ /10/ /01/ /04/ /07/ /10/ /01/ /04/ /07/ /10/ /01/ /04/ /07/ /10/ /01/ /04/ /07/ /10/ /01/ /04/2018 Monthly number of total sterling approvals for house purchases (seasonally adjusted) Large deposit borrowers up compared to May The proportion of large deposit borrowers - defined by this survey as having a deposit of 60% or more - increased between May and June. These borrowers occupied 32.9% of the market this month, modestly higher than last month, when the figure was 32.8%. Given small deposit borrowers also saw their market share increase, it was the mid-market borrowers who saw their share of the market squeezed during June. These customers saw their overall share of the market fall from 44.8% a month ago to 43.7% today. This figure is even lower than the 46.6% found in April. Thanks to a rise in small deposit borrowers share and the increased overall market, there was a sharp increase in the absolute number of these borrowers getting finance this month. The Mortgage Monitor revealed that 15,546 loans were approved to small borrowers during June, well above the 14,891 record a month earlier. Richard Sexton, Director at e.surv, comments: Benign market conditions mean this has already been an excellent summer for small deposit borrowers, and this good form has continued into June.

3 loans by region Region lending (June lending (May lending (April Northern Ireland 39.8% 32.8% 33.9% Yorkshire 23.8% 24.0% 23.2% North West 22.3% 23.5% 23.5% Midlands 28.7% 27.2% 30.1% Scotland 31.7% 32.7% 32.2% Eastern England 35.6% 35.7% 34.8% South/South Wales 36.7% 34.8% 36.4% South East 38.0% 38.2% 36.8% London 38.5% 40.0% 39.7% Regional differences hold strong during June The UK mortgage market continued to be varied, depending on where in the country a borrower is looking to buy. The London market remains the most difficult for firsttime buyers to get a foothold into. Just 16.2% of loans in the capital went to borrowers with small deposits, lower than anywhere else in the country. By contrast, those in Yorkshire enjoyed a much higher share of their local market. In this region some 33.7% of all mortgages went to those with small deposits - the highest recorded by the Mortgage Monitor. However, Northern Ireland displaced London as the part of the UK with the highest proportion of buyers with large deposits. In this region 39.8% of all approvals were to borrowers of this kind, ahead of London where the figure was 38.5%. The South East, with 38%, was another area to be dominated by large deposit customers. Close behind was the South and South Wales regions, where this figure was 36.7%, and then Eastern England at 35.6%. The North West was the region with the lowest proportion of buyers with small deposits, recording 22.3% in the month of June. The North West enjoyed a similar rate of small deposit buyers, recording 32.1% this month. Northern Ireland was close behind with a rate of 28.1%.

4 deposit loans by region Region deposit lending (June deposit lending (May deposit lending (April Northern Ireland 28.1% 35.7% 32.2% Yorkshire 33.7% 32.6% 30.8% North West 32.1% 32.1% 26.6% Midlands 26.2% 27.4% 25.5% Scotland 27.0% 21.9% 17.9% Eastern England 21.7% 20.8% 18.8% South/South Wales 22.2% 20.8% 18.9% South East 21.3% 18.9% 18.8% London 16.2% 13.8% 14.9% Richard Sexton, Director at e.surv, concludes: It really is a postcode lottery as to the local market you experience. Areas of London and the South East continue to be dominated by cash buyers and those with large deposits. Yet the opposite is true in areas of northern England, where there are better opportunities for those with small deposits to get onto the property ladder. But with lenders offering low rates across the whole country, now is a good time to lock into a cheap mortgage deal before rates eventually begin to rise once more. ENDS

5 Notes to Editors Methodology e.surv analyses detailed data on over one million mortgage valuations the firm carried out between August 2006 and today. Each month, the researchers analyse tens of thousands of valuations and use these trends to extrapolate from the Bank of England s mortgage data to publish mortgage approval numbers for the whole of the UK, before the Bank of England. The Mortgage Monitor is prepared by Rostrum for e.surv. The copyright and all other intellectual property rights in the Mortgage Monitor belong to e.surv. Reproduction in whole or part is not permitted unless an acknowledgement to e.surv as the source is included. No modification is permitted without e.surv s prior written consent. Whilst care is taken in the compilation of the report, no representation or assurances are made as to its accuracy or completeness. e.surv reserves the right to vary the methodology and to edit or discontinue the report in whole or in part at any time. About e.surv e.surv is the UK s largest valuation provider, directly employing over 400 residential surveyors across the UK, supported by a network of consultant valuers. The business is the largest distributor and manager of valuation instructions in the UK and is appointed as Panel Manager for more than 20 mortgage lenders and other entities with interests in residential property. The business also provides private survey products direct to the home-buying public. e.surv is a subsidiary of LSL Property Services plc. For further information, see Press contacts Charlotte Merlin-Jones Account Manager, Rostrum c.merlin-jones@rostrum.agency