1. UNDER EMBARGO UNTIL 00:01 HRS FRIDAY 12TH OCTOBER 2012
HOME LOANS FALL 7% IN SEPTEMBER AS FUNDING FOR LENDING FAILS TO BOOST MARKET
 House purchase loans fall to 47,603, 3rd worst September on record
 Tightening lending criteria drives fall in high LTV lending
 Average loan-to-value falls to lowest since January 2011
 Less than 5,000 purchase loans granted to buyers with a deposit of under 15%
 But lenders say FLS will boost lending significantly in Q4
House purchase loans in September fell 7% year-on-year to 47,603 – the third worst September since records
began in 1993 – as improved credit availability for lenders failed to translate into an improvement in lending,
according to research released this morning
The latest Mortgage Monitor, produced by e.surv chartered surveyors, found the fall in loans was steepest among
high LTV borrowers – typically first-time buyers. Loans for house purchase fell across all LTV bands and house
price brackets, suggesting the government’s Funding for Lending Scheme (FLS) is yet to make a telling impact on
the mortgage market.
The average LTV on a house purchase loan in September
Loans for house purchase in September fell to 59%, its lowest since last January, reflecting the sharp
(seasonally adjusted) fall in loans to borrowers with small deposits. Just 1 in 10 of
150000
all house purchase loans went to borrowers with an LTV of
100000 85% or over, continuing a three month trend. The number of
loans to borrowers with a deposit of less than 15% has now
50000
fallen below 5,000 for the last three months. The last time
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
that happened was between May and July last year.
Richard Sexton, business development director of e.surv, explains: “September isn’t just a one off. The mortgage
market has been struggling since early June, and is considerably weaker than it was this time last year. The period
between August 2011 and May this year marked a real upturn in lending. But that fillip planted false hope. Since
then, the effects of the double dip recession have sapped the confidence lenders have in the economy. That,
combined with a squeeze on the funding lenders get from the money markets, has dragged down lending. Criteria
on high LTV mortgages have become more restrictive, and this has choked off first-time buyer lending.”

2. LTV RATIO (for home purchases) Despite 18% more mortgages with an LTV of above 85% on offer since
0.63
0.61 April 2011, and lenders reporting an improvement in mortgage credit
0.59 over Q3, fewer borrowers have been able to access high LTV loans
0.57
0.55
because of toughening lending criteria. The apparent contradiction
0.53 between more LTV mortgage products on the market and a fall in
0.51
lending suggests lenders are not yet confident enough in the economy
0.49
0.47 to increase lending to borrowers with low deposits and low incomes
0.45
significantly.
Jul-08
Sep-07
Feb-08
Dec-08
May-09
Oct-09
Mar-10
Aug-10
Jan-11
Jun-11
Nov-11
Apr-12
Sep-12
September marks the fourth consecutive month of a year-on-year fall
in house purchase lending, suggesting the market is significantly weaker than it was this time last year. Lending in
Q3 was 7% lower than the equivalent period last year, with 11,019 fewer house purchase loans. To illustrate the
extent of the decline, house purchase lending in September is 10% lower than September 2009 – when the market
was still in the grips of the financial crisis.
POSITIVE SIGNS AHEAD
The picture was brighter on a month-on-month basis, with house purchase loans in September falling by a marginal
0.1% compared to August.
Richard Sexton explains: “Analysts have been quick to criticise the Funding for Lending Scheme after an
inauspicious start in August, but it will prove to be a slow-burn. The Bank of England’s latest credit conditions
survey suggests an improvement in house purchase lending may be on the horizon. Lenders told the Bank the
availability of secured credit will increase ‘significantly’ over the fourth quarter, and specifically referenced the
Funding for Lending Scheme as a key driving the improvement. Lenders say it has helped increased their
mortgage funds by 36%, the biggest increase since records began. If it is a slow-burn, FLS will begin to translate
into higher mortgage lending in the fourth quarter, which will help more first time buyers get a foot on the ladder.”
LOANS FOR HOUSE PURCHASE (seasonally adjusted)
Month Number Monthly change Annual change
April 51,823 2.0% 12.0%
May 51,098 -1.0% 9.8%
June 44,192 -12.6% -9.5%
July 49,561 12.1% -1.0%
August 47,665 0.2% -9.9%
September 47,609 -0.1% -6.8%
.
- Ends -

3. Methodology
e.surv analyses detailed data on over one million mortgage valuations the firm carried out between August 2006
and today. Each month, the researchers analyse tens of thousands of valuations and use these trends to
extrapolate from the Bank of England’s mortgage data to publish mortgage approval numbers for the whole of the
UK, weeks before the BBA, CML and Bank of England. The average margin of error over the last six months is
1.2% compared to the Bank of England final purchase approval data.
Notes to Editors
About e.surv
e.surv is a firm of chartered surveyors, directly employing over 350 chartered surveyors and a similar number of
consultants. The business is the largest distributor and manager of valuation instructions in the UK and is
appointed as panel manager for more than 25 mortgage lenders and other entities with interests in residential
property. The business also provides a number of private survey products direct to the home-buying public. e.surv
is owned by LSL Property Services plc. For further information, see www.lslps.co.uk
Press contacts
Adam Jones, The Wriglesworth Consultancy
a.jones@wriglesworth.com, 020 7427 1403
Monica Daniel, marketing manager, Surveying and Corporate Services
monica.daniel@lslps.com 01392 355555
The Mortgage Monitor is prepared by The Wriglesworth Consultancy for e.surv. The copyright and all other
intellectual property rights in the Mortgage Monitor belong to e.surv. Reproduction in whole or part is not permitted
unless an acknowledgement to e.surv as the source is included. No modification is permitted without e.surv’s prior
written consent.
Whilst care is taken in the compilation of the Report no representation or assurances are made as to its accuracy
or completeness. e.surv reserves the right to vary the methodology and to edit or discontinue the Report in whole
or in part at anytime.