The Bank’s Mortgage Lenders and Administrators quarterly statistics report found that there was £64bn worth of mortgage advances in Q1 2016, up 40.4% on Q1 2015 and an increase of 1.5% on Q4 2015.
Of the total lending in Q1, the report said 68.9% was for house purchase, 0.3% lower than in Q4 2015. The value of gross advances for house purchase stood at £44.1bn for the quarter, 46.8% higher than in the previous quarter.
The proportion of lending to first-time buyers decreased in the quarter, down 4% to 16.9% compared to Q4 2015. However, the value of the loans was higher, up £2.2bn to £10.8bn.
The buy-to-let proportion of lending increased from 15.9% in Q4 2015 to 21.1% in Q1 2016 and also increased by 4.3 percentage points from Q1 2015. By value, buy to let advances which includes remortgages, increased over the past year from £7.7bn in Q1 2015 to £13.5bn in Q1 2016, the highest value since the series began in 2007.
Steve Griffiths, head of sales and distribution at Kensington, said it’s no surprise that buy-to-let lending rose in the quarter, which included the rush to beat the Stamp Duty hike. But said the figures don’t offer a full view of the market.
“As more people choose to work for themselves, Britain’s workforce is changing, yet self-employed or contract workers can often find themselves in difficulty when it comes to securing a mortgage,” said Griffiths.
“The situation can be even harder for those who may have suffered from a negative ‘credit event’ in the past.
“We want to see a mortgage market that is fair for all. However, to achieve this goal, specialist lenders will need to work together with intermediaries to make it clear that there are the mortgages out there for borrowers who choose alternative forms of employment.”
The statistics also show that the proportion of gross advances at fixed interest rates decreased from 84.1% in Q4 2015 to 81.4% in Q1 2016.
Meanwhile, the proportion of balances outstanding on fixed interest rate loans increased by 1.7% between since Q4 2015 to 50.0% in Q1 2016.
The overall average interest rate on gross advances decreased by six basis points in Q1 2016 to 2.63%, the lowest rate since the series began in 2007.