Q1 mortgage lending hits 14-year high: BoE

Essex Home Finance
The value of gross mortgage advances in Q1 was £83.3 billion, 26.5% higher than in 2020 Q1 and the highest level since 2007.
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The value of gross mortgage advances in Q1 was £83.3 billion, 26.5% higher than in 2020 Q1 and the highest level since 2007, according to the latest Mortgage Lenders and Administrators Return (MLAR) statistics from the Bank of England.

MLAR is a quarterly statistical release aggregated from data on mortgage lending activities provided by around 340 regulated mortgage lenders and administrators.

The value of new mortgage commitments (lending agreed to be advanced in the coming months) was 15% higher than a year earlier, at £77.5 billion.

However, the share of mortgages advanced with LTV ratios exceeding 90% was 1.1%, 4.1pp lower than a year earlier, and the lowest level since these statistics began in 2007.

The share for house purchase for owner occupation was 64.1%, up 17.3pp from Q1 2020. The share of gross advances for remortgages was 18.0%, a decrease of 14.2pp since 2020 Q1, and the lowest since these statistics began.

Of the 64.1% of advances for house purchases by owner occupiers, lending to first-time buyers was 2.0pp higher than in 2020 Q1, at 21.8% of gross advances. The share advanced to home movers increased by 15.3pp on a year earlier, to 42.3%, the highest share for home movers since the statistics began in 2007.

The value of outstanding balances with arrears increased by 5.1% on the quarter, to £15.0 billion, the highest since Q3 2017. The proportion of total loan balances with arrears increased on the quarter from 0.93% to 0.96%.

Paul Stockwell, chief commercial officer at Gatehouse Bank, commented: “Buyers’ insatiable appetite to move home has meant the value of new mortgages started the year at highs not seen since before the 2008/09 financial crash.

“There has been frenzied activity in the market with movers searching for larger homes and more outdoor space, while the extension of the stamp duty discount to the end of June added more fuel to the fire in the first quarter of this year.

“The biggest stamp duty savings run out in just a few weeks’ time, yet measures from other housing indices suggest the frantic competition for property continues unabated.

“While lending may fall from these current highs, we still expect it to be an incredibly busy summer for the housing market.”

Original Article from Financial Reporter 08/06/2021

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