Although new lending value grew across all customer types, the BoE said that the proportion of loans to first-time buyers (FTBs) actually fell by 1% to 21%, with house movers and remortgagers taking up stronger shares.
The share of buy-to-let (BTL) lending decreased to 12.8% – the lowest percentage since Q3 2013.
At the end of Q3, the proportion of total loan balances in arrears decreased to 1.1%, or £15.5bn – the lowest level since the BoE collected data on this category in Q2 2016.
The data also showed that the total value of outstanding residential loans in Q3 stood at £1,385.6bn in Q3, a 4.1% jump.
Moreover, new commitments increased by an annualised 14%, from £61.0bn in Q3 2016 to £69.6bn in 2017 – the highest level since Q1 2008, which saw £74.7bn of new commitments made.
Meanwhile, non-seasonally adjusted data from UK Finance showed that the number and value of loans for both remortgaging and house purchases rose year-on-year.
The UK Finance data showed that the number of loans for first-time buyer (FTB) purchases jumped 10.5% year-on-year from 28,700 loans in October 2016 to 31,700 in 2017. Moreover, FTBs borrowed £51.bn in October – 13.3% higher than in 2016.
Home movers borrowed £7bn in October, up an annualised 18.6%, with 33,300 loans advanced – a 15.6% jump.
While the number of purchase buy-to-let (BTL) loans saw a 6.5% annualised change from 6,200 to 6,600, the value of these loans remained stable at 900 million.
Indeed, the UK Finance data showed strong remortgaging activity. BTL remortgaging totalled £2.4bn in October, up 20% from 2016. While homeowner remortgaging reached £7.3bn in October, a 16.4% year-on-year increase.
“Over the last year, the number of loans for remortgaging have been at record levels; this trend looks set to continue further as we head towards the end of 2017 and borrowers seek to take advantage of low interest rates,” said June Deasy, head of mortgage policy at UK Finance.
UK Finance data also showed that capital and interest payments for new loans remain near record lows for both home movers and FTBs.
Combined capital and interest payments as a percentage of income for FTBs remained stable at 17.2%, down 0.4% from a year ago. While payments for home movers remain unchanged from last year at 17.5%.
“Mortgage repayments as a proportion of income still remain at or close to their historic low point, and despite the recent base rate rise we can expect monthly mortgage payments to remain affordable for the vast majority of borrowers,” said Deasy.
Harry Landy, managing director of Enterprise Finance, said: “After last month’s drop, the re-mortgage and buy-to-let markets are beginning to gain momentum, which reflects the fact that borrower confidence is high – even at a time of on-going political and economic instability.”
Landy added: “However, although today’s figures are welcome, 2017 has been a turbulent year for the industry, so it’s important not to get carried away. What’s crucial to remember is that during times of wider economic uncertainty, consumers need more flexible financing to match their needs.
“Brokers need to be aware about what is available on the market, and there needs to be an improvement in education and awareness so that they can capitalise on market opportunities when they arise.”