Analysis from e.surv has found that over a fifth of mortgages in February were taken out by borrowers with small deposits - a substantially higher figure than both the previous month and the same point last year.
According to the report, borrowers with a deposit of 15% or smaller made up 20.5% of the market during February, up from 18.7% in January and 15.7% in February 2016.
This growth came despite the overall number of house purchase approvals dropping slightly between January and February. There were 66,911 loans (seasonally adjusted) approved this month versus 67,430 in January. This figure is down 7.4% compared to the same point in 2016.
The proportion of loans made to home buyers with large deposits dipped below 35% this month, but these borrowers continue to outstrip their small deposit counterparts. Larger deposit borrowers – defined as those with a deposit of 60% or more – made up 34.7% of the market in February.
However this figure is below the 35.4% of all mortgage approvals recorded in January and continues a general trend away from large deposit borrowers in recent months.
The North West reclaimed its position as the best place to purchase a home for small deposit buyers, who represented 30.8% of the North West mortgage market in February – higher than the 27.2% seen in January.
Yorkshire slipped back to second place with the proportion of small deposit loans reaching 30.1% this month, lower than January’s 31.6%.
These were the only two regions where the level of small deposit borrowers outnumbered large deposit ones. In the North West 24% of loans went to those with big deposits and in Yorkshire it was 25.2%.
Northern Ireland was the other area which saw more than 30% of the market taken by small deposit borrowers.
At the other end of the scale, London was the area most dominated by buyers with big deposits. Some 43% of borrowers in the capital this month had deposits of more than 60% - more than anywhere else in the UK. By contrast, just 12.8% of approvals in London went to small deposit borrowers – less than all other areas surveyed.
