You are here: Home - News -

BTL slumps to four-year low as higher LTI lending drives mortgage market – FCA

  • 12/09/2017
  • 0
BTL slumps to four-year low as higher LTI lending drives mortgage market – FCA
Mortgage lending between April and June was up 3.8% on the previous quarter and 8.1% on the same period last year, according to figures from the Financial Conduct Authority (FCA).

It said £62.7bn was advanced during the second quarter of 2017, taking the total value of all outstanding loans to £1,365.9bn, 1% higher than Q1 and 3.4% higher than the same time last year.

New commitments also increased by 12.5% to £69.1bn from £61.4bn in Q1.

While the share of buy-to-let has decreased to 12.5% during Q2, the lowest percentage since Q3 2013, higher loan-to-income (LTI) lending increased its share of new lending significantly.

Those in the highest LTI brackets for single incomes accounted for 10.8% of new lending, with high LTI joint income lending at 33.4%.

New lending at or over 90% increased by 0.7 percentage points to 4.6% in the quarter.


Purchases increase

The higher LTI increase is consistent with an increase in the share of new lending for purchases and reflects a fall in remortgage activity. The share of first-time buyers rebounded to 22.0% after a dip in the first quarter when the Help to Buy scheme’s mortgage guarantee was ended.

The FCA said the interest rate on new loans has continued to narrow in relation to the base rate, with 61.5% of new advances now a maximum 2% higher than base. New loans at 3%+ have been declining since Q3 2016 and now account for 11.8% of advances.

Arrears are down to 1.18% of total loan balances, the lowest level since the FCA’s statistics series began. The outstanding balance of arrears is now £16.2bn.

There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.


Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.


Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.


Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.
  • RT @robjupp: Great day yesterday for donations to @MortSleepOut. With Gift Aid, we are now close to £17,000. It would be great to get to £2…

Read previous post:
Inflation climbs back up to 2.9%

Inflation hit 2.9% in August, matching May’s four-year high, according to official statistics.