Gross mortgage advances jumped 16.7% from the previous quarter to £60.2 billion, marking the first quarterly rise since the third quarter of 2022
The total value of residential mortgage loans in the UK rose by 0.4% in the second quarter of 2024 to £1.66 trillion, representing a 0.3% rise compared to the same period in 2023, according to the Bank of England.
Gross mortgage advances jumped 16.7% from the previous quarter to £60.2 billion, marking the first quarterly rise since the third quarter of 2022. Year-on-year, gross advances were 15.5% higher.
New mortgage commitments, which represent lending agreed to be advanced in the coming months, rose by 11.3% quarter-on-quarter to £66.9 billion, 12.5% higher than the same period last year.
Bank of England’s latest Mortgage Lenders and Administrators Return also revealed a 2.7% increase in lending to borrowers with a high loan-to-income (LTI) ratio from the previous quarter to 42.5%, although this remains 1.2 percentage points lower than a year ago.
The share of gross mortgage advances for owner-occupier purchases rose by 2.9% from the previous quarter, reaching 57.5%. This figure was also up 3.1% year-on-year. In contrast, the share of remortgages for owner-occupiers declined by 3.3% to 28.6%, down 3.7% from a year earlier.
Meanwhile, BTL mortgage advances, including for house purchases, remortgages, and further advances, saw a marginal rise, increasing by 0.7 percentage points from the previous quarter to 9%, and were 0.8 percentage points higher than the same time last year.
New arrears cases declined by 0.5% to 11% of the total outstanding balances with arrears, a 5.3 percentage point drop compared to the previous year. However, the value of mortgage balances with arrears increased by 2.9% from the previous quarter, reaching £21.9 billion — 32% higher than a year ago.
The proportion of total loan balances with arrears rose marginally from 1.29% to 1.32% in the second quarter, the highest level since the second quarter of 2016.
The BoE’s latest mortgage statistics reflect a modest but important growth in both mortgage lending and commitments, with gross mortgage advances increasing by 16.7% from the previous quarter, said Simon Webb, MD of capital markets at later life lender LiveMore.
However, amid this growth, we also see challenges, particularly with the increased proportion of lending to high LTI borrowers and the increasing value of mortgage balances with arrears, which has reached its highest point since 2016.