The total value of gross mortgage advances increased by 12.8% between Q4 2024 and Q1 2025 to £77.6bn, the highest new advances since 2022 and 50.4% higher than a year earlier, according to the latest Mortgage Lenders and Administrators Return (MLAR) data.

The latest data for Q1 shows the impact of the stamp duty deadline at the end of March, with Q1 mortgage lending increasing but the value of new mortgage commitments decreasing by 1.5% from the previous quarter, although remaining 13.5% higher than a year earlier.

Residential advances increased by 2.6pp from the previous quarter to 66.3%, the highest share since Q2 2021, and was 11.7pp higher than a year earlier.

Of the 66.3%, lending to first-time buyers increased by 1.8pp to 31.4%, the highest share since reporting began in 2007, and was 5.6pp higher than a year earlier. As a result, the share of gross mortgage advances with LTV ratios above 90% increased by 0.4pp from the previous quarter to 6.7%, the highest share since 2008 and 1.5% higher than a year earlier.

The share advanced to home movers increased by 0.8pp to 34.9%, and was 6.1pp higher than last year.

The share of gross advances for remortgages decreased by 2.2pp to 21.3%, and was 10.5pp lower than Q1 2024.

New arrears cases fell by 1.7pp from Q4 2024 to 10.2% and were 1.2pp lower than a year earlier.

However, the number of new possessions increased by 12.3% to 2,307, the highest since 2019, and are 10% higher than last year.

The total stock of possessions increased by 7.2% from the previous quarter to 7,822, the highest since 2014, and are 29.7% higher than a year ago.

Martyn Smith, CEO of Black & White Bridging commented: “The latest MLAR data paints a nuanced picture of the mortgage market’s recovery. On the one hand, the sharp rise in gross advances and outstanding mortgage balances signals growing confidence among borrowers and lenders alike. But dig a little deeper, and we see a market still feeling its way forward.

“The surge in lending to first-time buyers is encouraging, showing that pent-up demand is being unlocked — yet the dip in remortgaging and softening in new commitments suggests many homeowners remain cautious, likely waiting for greater rate stability.

“From a specialist lending perspective, the uptick in high LTV borrowing — now at its highest level since 2008 — speaks to a growing appetite for risk and the increasing importance of lenders who can handle more complex cases. But this must be balanced against a rise in possessions, which is a warning that affordability remains under pressure for many households.

“In short, while momentum is returning, it’s far from a straightforward bounce-back. Lenders will need to remain agile, responsive and more personalised in their approach as the market continues to rebalance.”

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