Mortgage approvals jump to highest level for two years

Loans for home purchases reached their highest number since December 2009 in November thanks to the loosest mortgage lending conditions seen since the Lehman collapse, according to the latest Mortgage Monitor from e.surv chartered surveyors.

Purchase approvals rose from 52,743 in October to 54,658 in November, an increase of 4%, and 15% higher than November 2010, according to the Daily Telegraph.

The increase was triggered by the loosest lending conditions since October 2007, as the average deposit fell back to 38% in November, down from 40% in October.

Loans to borrowers with a deposit of 15% or under accounted for 13% of all lending in November, up from 10% in October, and the highest since October 2008.

The average deposit on typical first time buyer property fell to 31%, the lowest since August 2008, and down from 33% in October.

The rise in purchase approvals was supplemented by buy-to-let investors who are taking advantage of increased lender appetite to support the professional BTL landlord in particular.

Purchase approvals for homes below £125,000 - typical first time buyer and buy-to-let property - rose to 12,791 in November, up from 11,904 in October.

Richard Sexton, director of e.surv, said: "For the last few months, the banks have been focusing their lending on specific groups, particularly buy-to-let investors, but this is the first time they appear to have increased lending to first time buyers in any notable sort of volume.

"The banks are under intense political pressure to lend more to first time buyers, despite being under scrutiny on the amount of capital they hold.

"They pushed out more high-loan-value mortgages over the summer to try and increase their market share, and we're beginning to see a greater uptake of these mortgages after an initial lag."