According to the latest statistics from Bank of England (BoE), the value of new mortgage commitments, which is lending agreed to be advanced in the coming months, was £82.5bn. This is an increase of 6.7 per cent on the previous quarter and 6.6 per cent than same period last year.
The BoE added that the share of gross advances with interest rates lower than two per cent above bank rate was 85.5 per cent in Q1 2022. This is was increase of 26.5 per cent on the same period last year.
It noted that this would the highest increase seen since 2008, which it said was driven by the increase in the bank rate earlier in the quarter.
The share of advances with rates between two and three per cent above the base rate contracted over the quarter from 19 per cent to 9.8 per cent.
The proportion of advances with interest rates of three per cent or over the base rate decreased by five per cent to 4.7 per cent from the previous quarter.
High LTV lending falls slightly
The BoE said the share of advances with LTV ratios of 90 per cent or above fell by 0.2 per cent to 3.9 per cent Q1 2022 compared to the prior quarter. This was 2.8 per cent higher than a year earlier.
It added that the share of mortgages advanced with LTVs over 95 per cent was 0.2 per cent, which is broadly unchanged from the previous quarter.
Mortgages advanced with LTV ratios over 75 per cent decreased by 1.2 per cent to 3.55 per cent compared to the previous quarter and by 1.3 per cent compared to the same period last year. It added that this was the lowest level seen since 2018.
The BoE said that lending to borrowers with a high loan to income (LTI) ratio came to 49.7 per cent in Q1 2022, which is up from 0.1 per cent than the same period last year.
Borrowers with single income with an LTI ratio of four or above made up 11.8 per cent of gross mortgage lending, which it said was “broadly unchanged” from the previous quarter.
For borrowers with a joint income with an LTI of three or above accounted for 37.8 per cent of gross mortgage lending, which is 0.5 per cent down on the previous quarter.
Gross mortgage advances for first-time buyers falls
Owner occupiers made up 86.6 per cent of gross mortgage advances, of which remortgages accounted for 29 per cent. This is up by 11 per cent and 0.8 per cent respectively from Q1 2021 and Q4 2021.
Buy-to-let made up 13.4 per cent of gross mortgage advances, which is up by 1.7 per cent from the same period last year.
House purchases made up 50.7 per cent of gross mortgage advances, a contraction of 2.3 per cent on the previous quarter and a fall of 13.4 per cent from Q1 2021.
Within that, first-time buyers accounted for 21.4 per cent of gross advances, which is 0.5 per cent lower than the same period last year and 1.9 per cent lower than the previous quarter.
Homemover advances fell by 13 per cent year-on-year to 29.3 per cent, and 0.4 per lower than Q4 2021.
Further advances and other mortgages, which includes lifetime mortgages, made up accounted for 6.9 per cent of gross advances in total.
Outstanding balances with arrears lowest level since 2007
The BoE said that the value of outstanding balances with arrears fell by 1.1 per cent on the quarter and 11.3 per cent year-on-year to £13.3bn.
It said that this was the lowest it has been since recording began in 2007.
The BoE said that the proportion of total loan balances with arrears fell on the quarter from 0.84 per cent to 0.82 per cent, which it said was the lowest since recording began.