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Mortgage approvals and LTVs rise sharply

Purchase volumes increased markedly in the cheapest house price brackets, indicating that more first-time buyers are getting a foot on the property ladder, with properties up to £125,000 accounting for a third of all approvals. The steady volumes in the most expensive price brackets continue to show that they remain more immune to the credit crunch and the availability of mortgage finance

The average loan-to-value mortgage is at its highest level for three years, breaking the 60% barrier for the first time since April 2008. It is now 60.8%, a sixth consecutive monthly increase, and is up from 56.2% in March 2010.

The volume of high LTV mortgages has increased, with the proportion of approvals in the higher LTV bands significantly higher than October 2010. Volumes increased in the 75% to 85% LTV bracket by twice the pace of the overall market since October last year, while the 85% to 90% bracket has grown by a third faster.

Richard Sexton, business development director of e.surv said: "More people are getting higher LTV mortgage loans, and approvals on cheaper properties have increased, which is a sure indication that more first-time buyers are finally getting onto the housing ladder.

"Rents have reached record levels and with higher LTV products available for the best borrowers, it’s no wonder more first-timers are grasping the nettle while rates are still cheap. Homeownership looks good value, especially if you fix your rate – more of them are realising this and getting onto the ladder.

"Yes, March is historically a cheery month for the market, but the brisk increase of approvals since January and the steady rise of LTVs indicate that the effects of a stuttering economy on the mortgage market may have been overplayed."

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