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The number of mortgages agreed in June rose as providers did more lending with 10 to 15% deposits.

Lenders are also struggling to meet 6 month  lending targets after a slow start to the year.

Low-income buyers applying for the higher loan-to-value (LTV) products continue to struggle with tight criteria.

Fewer first time buyers got onto the property ladder in June as approvals for homes under £125,000 – typical first time buyer property – accounted for only 22% of total approvals in June, down from 23% in May, and the lowest level since November 2010. This contrasts to early 2008 when purchases of the cheapest property accounted for 30% of all approvals, largely by wealthier buyers.

Richard Sexton, business development director of e.surv said: “There has been a great deal of recent chatter about 95% LTV products hitting the market, but if you delve beyond the headline loan-to-value ratio it is clear criteria remain too restrictive for the majority of lower income buyers.”

The South saw a greater increase in purchase approvals than the North, with house purchase approvals in London up 12.3% in June, and 6.9% in the South-East. In contrast, in Scotland purchase approvals fell 1.4%, while activity was also relatively subdued in Cumbria and the North-East, with increases of just 2.8%.

Overall first time buyer numbers in London remain relatively low, reflected by the average LTV, which is well below the national average at 56.1% and lower than any region in England and Wales, reflecting the larger pool of wealthier buyers. At the height of the boom in May 2007, LTV s in London were 68.5% and higher than the national average.

“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,” said Sexton.