A 21 per cent drop in mortgage approvals last month was described as a return to normality by chartered surveyors today. The number of mortgages approved in February stood at 46,499, compared to a two-year peak of 58,728 the previous month. Researchers behind the monthly Mortgage Monitor report from e.surv said that, as predicted, this was down to the end of the rush caused by first-time buyers hurrying to beat the deadline for the stamp duty tax break for property purchases under £250,000, which finishes on the 24th of this month. E.surv said that the number of first-time buyers getting mortgages had fallen to the lowest level since last July, a long-expected dip after the boom months of December and January. The number of mortgages approved for purchases under £250,000 fell last month from 43,459 in January to 33,944. Furthermore, the average loan-to-value (LTV) dropped to 61 per cent the third consecutive monthly fall. There were only 5,533 mortgages approved last month for borrowers with 85 per cent LTV or lower, also the lowest figure since last July. In January the figure stood at 7,870. E.surv director Richard Sexton commented: The stampede of first-time buyers rushing to beat the stamp duty deadline bloated the January figures out of all recognition. They created an artificial spike in approvals, which shouldnt be misconstrued as a sign the market is resuscitating in the long-term. At first glance the drop in approvals during February looks alarming, but it is a return to normality after an abnormally frantic winter.
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