First-time buyers see no let-up in home loan drought

Mortgage approvals surged in June – but only so that the banks could meet their half-year lending targets, according to a new report by one of the country's leading surveying firms. The underlying picture, says e.surv, is one of continuing weakness, and indeed a mortgage market growing even tougher for first-time buyers.

Based on some 21,000 residential property valuations, about 45 per cent of the total market, e.surv estimate that approvals were up 6.7 per cent between May and June, with banks anxious to meet their planned lending targets, making up for depressed activity earlier in the year.

But first-time buyers are making up a steadily shrinking proportion of total lending, as banks remain cautious about risk. Those getting their first foot on the housing ladder accounted for only 22 per cent of approvals in June, down from 23 per cent in May. This contrasts to early 2008 when they accounted for 30 per cent of all approvals. Approvals rose fastest in London, which saw a 12.3 per cent increase, reinforcing the capital's increasing disconnect from the rest of the UK market.

Restrictive criteria on some new high loan-to-value mortgage products meant few low-income first- time buyers were actually able to qualify, e.surv said.

Richard Sexton, the business development director of e.surv, said: "Lenders still have to deal with significant risks to their balance sheets so, after a concerted effort to meet lending targets for the first half of the year, the next few months could see a return to a lower level of activity as they ration funds cautiously in the third quarter."

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<p>
<b>Kathryn Williams</b>
</p>
<p>
When I was supporting Ray La Montagne I was six months pregnant. He had been touring for a year and he was exhausted and full of the cold. I was feeling motherly, so I would leave presents for him and his band: Tunnock's Tea Cakes, cold remedies and proper tea. Ray seemed painfully shy. He hardly spoke, hardly looked at you in the face. I felt like a dick speaking to him, but said "hi" every day. </p>
<p>
He was being courted by the same record company who had signed me and subsequently let me go, and I wanted him to know that there were people around who didn't want anything from him. At the Shepherds Bush Empire in London, on the last night of the tour, Ray stopped in his set to thank me for doing the support. He said I was a really good songwriter and people should buy my stuff. I was taken aback and felt emotionally overwhelmed. Later that year, just before I had my boy Louis, I was l asleep in bed with Radio 4 on when Louis moved around in my belly and woke me up. Ray was doing a session on the World Service. </p>
<p>
I really believe that Louis recognised the music from the tour, and when I gave birth to him at home I played Ray's record as something that he would recognise to come into the world with. </p>
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