Mortgage approvals in May up 1.2 per cent year-on-year

Mortgage approvals in May were up 1.2 per cent when compared with May 2018, according to the latest data.

There were 65,801 residential mortgage approvals in May 2019, with a report suggesting that competitive deals offered by lenders have helped the market.

It follows a strong performance in April when the trade association UK Finance said that banks and building societies approved the largest number of mortgages for two years.

The growth in mortgage approvals is positive, with mortgage approvals used as a useful indicator of future market performance.

However, other areas of the property market are struggling. According to research, existing homeowners have driven the mortgage market in recent months, while total lending dropped 0.7 per cent from April.

The proportion of loans given to first-time buyers and purchasers with smaller deposits also dropped 0.7 per cent, with the figure now at 27.7 per cent, with the proportion of loans given to larger deposit purchasers growing 0.2 per cent to 24.5 per cent.

The mid-market borrowers’ market share increased significantly, rising by 1.6 per cent to 47.8 per cent in May, returning to the level it was at in March.

Richard Sexton, Director at e surv, said: “While few people are moving when they don’t have to, first-time buyers are still desperate to get onto the ladder. Existing homeowners are being tempted into the market by near-record low interest rates.

“Those looking to switch could save hundreds of pounds a month by moving to a cheaper deal from a rival lender.

“The strength of the remortgage market means that many mid-market borrowers, who often benefit most from switching, are flocking to lenders in search of a cheaper deal, supported by advice from mortgage professionals.”