The value of gross mortgage advances was £68.8bn in Q4 2024, the highest total in two years, data from the central bank found.
The Bank of England’s Mortgage Lenders and Administrators Statistics for the period revealed this was 4.9% higher than the previous quarter and 29.9% up on the year before.
There was also a 4.9% quarterly rise in the value of new mortgage commitments, lending agreed to be advanced in the next few months, which totalled £63.9bn in Q4. Again, this was the highest total since Q3 2022 and a 50.7% increase on the prior year.
The value of all outstanding residential mortgage loans was 0.5% higher than the previous quarter at £1.67trn, the highest figure since reporting began in 2007. This was also a 1.3% rise on the same period in 2023.
Uptick in remortgage and first-time buyer activity
The proportion of lending for buy-to-let (BTL) purposes rose by 0.3% from the last quarter to account for 8.2% of business. This was 1.2% higher than the year before.
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Owner-occupier lending made up 91.85% of mortgage activity in Q4, while the share of advances to different borrower types stayed mostly unchanged from Q3 to Q4.
Advances for house purchases were the only kind of borrowing that contracted, falling by 0.8% to a share of 63.7% of overall activity. However, this was 3.9% higher than the year before.
The share of new lending for remortgages rose by 0.7% quarter-on-quarter to 23.5%, and was 4.8% down on 2023.
There was a 0.3% rise in the share of lending to first-time buyers compared to the previous quarter, making up 29.6% of advances. This was the highest share since reporting began in 2007 and 1.9% up on the year before.
Marginal drop in high-LTV and high-LTI lending
The share of new mortgage lending with loan-to-value (LTV) ratios above 90% fell by 0.3% quarterly to 6.3%, but was 0.8% higher than the previous year.
Within this, there was a 0.1% quarterly decline in the share of mortgages advanced with an LTV over 95%, and this was 0.1% down on the same period a year earlier.
The proportion of gross mortgages advanced with LTVs more than 75% dropped by 0.5% from Q3 to Q4 to a share of 44.1%, but this was 4% up on the year before.
The share of lending to borrowers with a high-loan-to-income (LTI) ratio rose by 0.5% from the previous quarter to make up 45.8% of activity. This was 3.1% higher than the year before.
The central bank defines high-LTI lending as a single borrower with an LTI ratio of four or above or borrowers with a joint income with an LTI ratio of three or higher.
The share of high-LTI lending to single borrowers was 10.1% in Q4, a 0.5% lift on the prior quarter and 1.4% higher than the year before. High-LTI lending to joint borrowers stayed flat at 35.8% of advances, but was 1.7% up on the year before.
Mortgage rate stability
The share of mortgage advances with interest rates less than 2% higher than the base rate fell by 0.2% from the previous quarter to 96.4%. This was 0.8% higher than the year before.
The Bank of England said this stability mirrored interest rates during the quarter, which were in line with the 0.25% cut to the base rate.
The share of advances with interest rates between 2% and up to 3% higher than the base rate rose by 0.3% quarterly to 1.7%, and was 0.2% lower than the prior year. The share of advances with interest rates of 3% or more than the base rate dropped by 0.1% quarter-on-quarter to 1.9%. This was 0.6% down on the same period in 2023.
Arrears rise as possessions fall
There was a 2.3% increase in new arrears cases, representing 12% of outstanding balances in arrears. This was 1.5% down on the year before.
The value of outstanding mortgage balances in arrears also rose by 1.3% from the previous quarter to £22.1bn, and this was 8.4% higher than in Q4 2024.
Of the £22.1bn mortgage accounts in arrears, there was a 3% fall in the share of non-regulated mortgages from the previous quarter to £4.9bn. However, this was 4.1% up on the year before.
The share of total mortgage balances with arrears relative to all outstanding mortgage balances remained flat on the quarter before at 1.3%. This was a 0.1% rise on the year before.
There were 0.8% fewer new possessions in Q4 compared to the previous quarter, totalling 2,057, but this was 41% higher annually.
The total stock of possessions rose by 4.7% quarter-on-quarter to 7,302 and was 39.5% up on the year before.
