A growing number of first-time buyers are entering the property market as a consequence of slightly more relaxed mortgage lending criteria, according to e.surv, a firm of surveyors.
Homes under £125,000 accounted for 27% of all mortgage approvals in April compared to only 20% in April 2010 and a twelve month average of 23.8%.A year ago wealthier buyers represented a disproportionate share of the market.
That has now begun to correct. In April 79% of all approvals were for homes under £250,000 - typical first time buyer property. This is up from 71% in April 2010.Lenders are beginning to loosen their criteria, which has helped more first-time buyers qualify for high loan-to-value (LTV) home loans.
LTV values are up across the market, reaching a three year high of 61% in April. But LTV's are increasing fastest at the lowest end of the market, aiding first-time buyers.
The average LTV for properties under £125,000 in April was 68%, compared to 64% in April last year.Total mortgage approvals rose 1.8% in April, up from 47,577 in March to 48,435.
This is the fourth consecutive month of growth as the market continues its slow crawl back to health after a sluggish Christmas period. The annual decline slowed from 2.9% in March to 2.5% in April.
Richard Sexton, business development director of e.surv said: "More first time buyers are getting onto the property ladder as they look to escape the record cost of renting and take advantage of loosening lending criteria. They are realising that with renting so expensive home-ownership is the more attractive option, especially with lenders now keener to offer fixed rate deals."