The Bank of England’s (BoE’s) Mortgage Lenders and Administrators report showed the gross mortgage lending figure was also 8.9% higher than the previous quarter and up on £61.4bn during the same period last year.
The value of new mortgage commitments fell by 1.3% quarter-to-quarter to £66bn, but was 34% higher than last year, when this amounted to £49.2bn.
The outstanding value of all residential loans rose by 0.6% in the period since Q2 to £1.67trn. This was the highest stock of outstanding mortgages since the first quarter of 2021 and 0.8% higher than a year ago.
Share of high-LTV mortgage lending surges
The share of mortgages lent at high loan-to-value (LTV) tiers above 90% rose by 0.6% to account for 6.6% of lending, the highest share of business since Q2 2008. This type of lending was also 1.6% up on last year.
Five ways we’ve improved our Premier service
Sponsored by Halifax Intermediaries
Within this, the share of mortgages issued at above 95% was flat on the previous quarter at 0.4%, and 0.1% higher than last year.
The proportion of loans at LTVs exceeding 75% was also at a 16-year high, rising by 1.8% since Q2 to make up 44.5% of business in Q3. This was the highest share since Q1 2008 and also 5.1% greater than last year.
In Q3, the proportion of lending to borrowers with a high loan-to-income (LTI) ratio increased by 2.9% on Q2 to 45.3%. This was 0.1% lower than last year.
For borrowers with a single income and an LTI ratio of four or above, this rose by 1.2% from Q2 to Q3 to make up 9.5% of lending. This was 0.8% up on the same period in 2023.
Lending to borrowers with a joint income and an LTI ratio of three or above accounted for 35.8% of business in Q3, 1.7% more than in Q2 but 0.9% lower than a year earlier.
The share of gross mortgage advances with interest rates less than 2% above the bank rate, including at or below this level, fell by 0.4% quarter-to-quarter to 96.6%. This was flat on the year before.
The share of lending with interest rates between 2% and up to 3% above the bank rate rose by 0.2% quarter-to-quarter to 1.4%. This was 0.1% lower than last year.
The proportion of gross mortgage advances with interest rates at 3% or more than the bank rate came to 2%, 0.2% up on Q2 and 0.1% higher than the same period in 2023.
Lending to FTBs rises; BTL falls
The BoE data showed the share of gross mortgage lending for buy to let (BTL) declined by 1.1% from the previous quarter to 7.9%, but was 0.5% higher than last year.
The share of lending to owner-occupiers came to 92.1%.
Within this 92.1% of lending to owner-occupiers, remortgage advances dropped by 5.8% to a share of 22.8%. This was 7% lower than last year.
The proportion of lending for house purchase increased by 6.9% since the last quarter to 64.4%, the highest share of this business since Q2 2021. This was also 6.1% higher than in 2023.
Of the 64.4% share of lending for owner-occupied purchases, first-time buyers made up 29.3% of business. This was 1.9% more than in Q2 and 3.1% up on last year. The central bank said it was also the highest share since reporting began in 2007.
Lending to homemovers rose by 5% quarter-to-quarter to 35.1%, the largest increase since Q4 2020 and 2.9% higher than in 2023.
Gross lending for other mortgages, including lifetime mortgages, stayed flat quarterly at 4.9% but was 0.4% higher than the year prior.
New arrears fall as possessions increase
The share of new arrears cases as a proportion of all outstanding balances with arrears fell by 1.3% in the period since Q2 to 9.7%. This was 6.3% lower than in 2023.
The value of outstanding mortgages with arrears totalled £21.9bn, 0.4% less than in Q2 but 17.5% higher than the same period a year earlier.
Of this balance, the value of non-regulated mortgages with arrears amounted to £5bn. This was 0.1% up on Q2 and 21% higher than the previous year.
The share of mortgages in arrears stayed the same as Q2 at 1.3% but was 0.2% higher than the year before.
There were 2,074 new possessions in Q3, 4.6% higher than in Q2 and 45.5% up on 2023.
The total stock of possessions came to 6,976, 7.6% up on the preceding quarter and 42.4% higher than last year.
