The FPC, headed by Bank of England governor Mark Carney, said the figures partly reflected an increase in household debt and partly a fall in disposable income caused by a sharp increase in taxes paid by householders.
The ratio was now 60% higher than in 1988, said the FPC.
But debt servicing costs remain low, said the committee, which added the aggregate debt service ratio – defined as interest payments plus regular mortgage principal repayments as a share of household disposable income – was 8% in the first quarter (Q1) of 2017, below its average since 1988 of 8.8%.
The share of households with mortgage debt servicing costs exceeding 40% of their income (the percentage beyond which historical evidence suggests that households are materially more likely to experience repayment difficulties) remained small, at just 1%.
Bank lending to UK households and companies grew by 3.7% in the twelve months to 2017 Q2, closely in line with nominal GDP growth of 3.6%. Within that, borrowing by households grew by 3.9%, while borrowing by companies grew by 3.1%.
The FPC pointed out that housing market activity had been relatively weak in the first half of the year, with mortgage approvals for new home purchases falling by 3.3% relative to 2016 H1.
Residential mortgage lending grew by 3.1% in the twelve months to the end of Q2 2017. Lending spreads on new owner-occupier mortgages were 167 basis points, in line with their average since 1997. There were some signs, however, that strong competition among lenders in the mortgage market was feeding through into increased risk appetite over non-price terms.