e.surv in its Mortgage Monitor report talks about the eurozone crisis pushing home loans down by 2.5 % in May. This has further led to banks reducing lending. Know more about real estate and property valuation services by visiting our website www.esurv.co.uk

1. UNDER EMBARGO UNTIL 00:01 HRS FRIDAY 15TH JUNE 2012
EUROZONE CRISIS PUSHES HOME LOANS DOWN 2.5% IN MAY
 First time buyers hardest hit: loans for new buyers drop to lowest level for 10 months in May
 Escalating Spanish and Greek debt crises tighten credit conditions and prompt banks to reduce
lending
 Loans for house purchase drop 2.5% to 50,525 in May
 Increased funding costs and balance sheet pressures force banks to reduce high LTV lending
 Lending to borrowers with small deposits drops for fourth consecutive month
New home loans fell 2.5% in May to 50,525, with first time buyers particularly badly hit, as pressures from the
eurozone forced banks to scale back their lending and reduce the number of loans to borrowers with small
deposits, according to the latest Mortgage Monitor from e.surv chartered surveyors.
First time buyers were the hardest hit by the tightening lending
MORTGAGE APPROVALS (for home conditions. This was reflected in loans for the purchase of
purchases) - MONTHLY CHANGE
15% typical first time buyer property (worth up to £125,000) falling
10% to their lowest level since July last year. There just 11,307
5%
such loans in May, down 3% from 11,919 in April.
0%
-5%
Increasing funding costs and exposure to the eurozone debt
e.surv May
-10%
forecast crisis forced banks and building societies to reduce their high
-15%
loan-to-value lending in May, and up rates on new mortgages.
-20%
The number of house purchase loans to borrowers with small
-25%
deposits fell for the fourth consecutive month. There were just
May-09
Nov-09
Feb-10
May-10
Nov-10
Feb-11
May-11
Nov-11
Feb-12
May-12
Aug-09
Aug-10
Aug-11
5,457 loans to borrowers with a deposit of less than 15% in
May, falling from 5,597 last month.
Only 1,213 of those loans were to borrowers with a deposit of less than 10% (accounting were less than 3% of total
new loans), compared to 1,434 in April, illustrating it is becoming more difficult for borrowers to access high LTV
loans.
The market has begun to steadily regress following a marked recovery over last autumn and early winter. After
hitting record lows last autumn, rates have crept upwards over the last few months, and banks have decreased the

2. number of loans to borrowers with small deposits. In the fourth quarter of 2011, there was an average of 6,670
loans per month to borrowers with a deposit of less than 15%. Over the quarter up to May, the average has fallen
sharply to 5,421 per month.
This reflects the Bank of England’s survey of credit conditions for the second quarter of the year, which said
although demand for low deposit mortgages has increased, banks will be forced to reduce the number of loans for
first time and lower income borrowers.
To show just how far off high loan-to-value lending is from recovering to its pre-2008 levels, there were 39,051
loans to borrowers with a deposit of under 15% in May 2007, almost four times as many as in May this year.
House purchase loans were up 8.7% year-on-year, however May last year was a weak month by historic standards
(in May 2011, loans for house purchase were 7.2% lower than in May 2010).
LTV RATIO (for home purchases)
Richard Sexton, business development director of e.surv,
0.70
explains: “The market has shown real fighting spirit and, for
0.65
the time being, has stood up well to the eurozone crisis. The
effects have been widely felt in the form of higher rates and
0.60 fewer loans, but by no means has lending fallen off a cliff.
0.55
The panic in the wholesale markets has pushed up funding
0.50 costs steadily since the late autumn. For a while, banks
were able to absorb the costs without borrowers feeling the
0.45
effects, but we’ve now reached a watershed point where
May-07
Oct-07
Mar-08
Jan-09
Jun-09
Nov-09
Feb-11
Jul-11
Dec-11
May-12
Sep-10
Aug-08
Apr-10
their balance sheets can no longer shoulder the burden.
Banks have responded in a measured fashion by passing
these costs onto the consumer: rates are creeping upwards – particularly on new mortgages – and high loan-to-
value lending has fallen. The upshot is it has become more difficult for first-time and low income buyers to get a
mortgage.
In addition to their increased funding costs, banks are also concerned about their exposure to the debt-riddled
eurozone countries. UK lenders are terrified by the prospect of a messy Greek exit from the euro, which could
come quickly after Sunday’s election. If it happens, the effects will resound loudly throughout the mortgage market.
As ever, first time buyers will be hit the hardest.
It’s certainly not all doom and gloom. Lending levels can’t fall much lower than they already have. But the growth
prospects for the mortgage market are tied inextricably to events in the eurozone. Lending won’t recover with any
conviction until the turmoil eases. The fortunes of the mortgage market over the coming months will be closely
linked to decisions made in Brussels, Athens and Berlin.”

3. LOANS FOR HOUSE PURCHASE (seasonally adjusted)
Month Number Monthly change Annual change
Dec 52,939 0.6% 24.7%
Jan 58,728 7.0% 30.0%
Feb 49,778 -15.0% 7.0%
Mar 51,067 3.0% 9.0%
April 51,823 2.0% 12.0%
May forecast 50,524 -3.0% 9.0%
- Ends -
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. In January e.surv forecast 58,610 purchase
approvals, only fractionally out from the 58,728 published by the Bank of England later in the month.
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

4. 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.