U.K. mortgage approvals climbed 21 percent in July from a year earlier as bank lending to homebuyers with smaller deposits soared, e.surv Ltd. said.
The total of 56,475 was the most for July since 2007, the unit of London-based LSL Property Services Plc said in a report today. Loans to buyers with a deposit of 15 percent or less, known as high loan-to-value borrowers, increased 56 percent to 6,946.
“Confidence is seeping back into the mortgage market,” said Richard Sexton, director of e.surv, a chartered surveyor. “High-LTV borrowers are enjoying more success in qualifying for house-purchase loans as banks begin to ease lending criteria.”
A pickup in demand for homes is reviving Britain’s property market. Chancellor of the Exchequer George Osborne has introduced plans to increase mortgage availability and the Bank of England has implemented a program to boost credit after the financial crisis prompted banks to rein in lending and demand higher down payments.
Most high loan-to-value lending took place in the north of England. About 24 percent of the total went to borrowers in the northeast and Cumbria with 23 percent granted in the northwest and 20 percent in Yorkshire.
“The north-south divide is finally narrowing,” Sexton said. “It’s getting easier for first-time buyers nationwide to access the mortgages available to them, as banks extend more lending to high LTV borrowers across the country.”
Approvals overall fell 2 percent in July from June, e.surv said.