Mortage Approvals Drop For First-Time Buyers

The Council of Mortgage Lenders have reported today that the number of mortgages approved during June reached 45,000, a 23% improvement upon May’s figures and just 6% lower than the number of mortgages approved in June 2008. This might be evidence for a stabilisation of the market, but only in certain areas. Further figures from the CML show that the number of new borrowers was actually 7% lower than last June.

This is no doubt down to stricter lending criteria and the higher deposits now demanded by banks and building societies. Last year for example, the average loan-to-value ratio was 87%, but in June of this year it was just 75%, clearly showing that big deposits are being put down for most house purchases. With lenders asking for higher deposits, the 7% drop in new borrowers is the best evidence we’ve seen so far to show first-time buyers are struggling to get onto the property ladder.