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High LTV mortgage lending takes largest share since 2008 – BoE

  • 10/12/2019
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High LTV mortgage lending takes largest share since 2008 – BoE
High loan to value (LTV) mortgages advanced in the three months to September accounted for the largest share of overall mortgages in more than a decade.


Quarter three statistics from the Bank of England revealed that the share of lending above 90 per cent loan to value (LTV) was 5.9 per cent.

Lending in this LTV bracket is now at its highest since quarter four 2008.

The value of gross mortgage lending in quarter three was £73.3bn, broadly in line with the same quarter in 2018. Compared to Q2, it was up 11 per cent from £66.1bn.

Mortgage approvals in the three months to September were also worth £73.8bn, an increase of 1.1 per cent on the year before.

The proportion of mortgages priced at three per cent or more above the Bank Base Rate, currently 0.75 per cent, had also shrunk to its lowest level since quarter three 2008 to 5.7 per cent.

Mortgages priced at less than two per cent above bank base rate accounted for the greatest proportion of mortgages at just over 84 per cent.

Buy-to-let lending, as a proportion of overall mortgage advances, remained at 12.3 per cent on par with Q3 figures in 2017 and 2018. The share of home loans advanced to owner occupiers was just under 90 per cent. Of those advances, the proportion of remortgages fell to 28 per cent from around 30 per cent.

High loan to income lending remained unchanged year-on-year at around 47 per cent of all mortgage lending.

Mark Pilling, managing director of Spicerhaart Corporate Sales, said: “The trend for higher loan to value mortgages is always a concern, as we head into uncharted waters next year.

“There is no way, at the moment, to predict what will happen in the economy when, and if, Brexit is completed and there is a real risk that interest rates will rise. With this in mind, it is more important than ever for lenders to ensure long term affordability. We do not want to find ourselves back in a situation where repossessions begin to rise and people lose their homes.”

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