It was a positive start to the year for the UK mortgage market, with an increase in the number of small deposit mortgages being approved, latest statistics show.

The Mortgage Monitor from e.surv found that the approval for small deposit mortgages has been increasing month-on-month. In January 2018, approximately 21 per cent of all mortgage approvals went to small deposit buyers, well above the recent months. In December 2017, small mortgage approvals accounted for 18.2 per cent of loans while the month before it was just 17.2 per cent.

According to e.surv, January’s data is the second full month of data following the Bank of England’s decision to increase the base rate to 0.5 per cent. The increase in the number of borrowers with small deposits is attributed to the rate rise, plus the speculation in the weeks leading up to the decision.

First-time buyers constituted a sizeable portion of the small deposit mortgages, indicating their activity in the market with the government offering them stamp duty relief.

In London, the share of loan approvals for small deposit mortgages was 16.6 per cent. The share of borrowers with a larger amount of equity was higher at 36.7 per cent of all loans.