The value of new mortgage commitments across the UK reached £78.9bn in the third quarter, a 6.8% increase from a year earlier and the highest level since 2007 Q3, new Bank of England (BoE) statistics have revealed.

Figures also showed the value of gross mortgage advances in 2020 Q3 was £62.5bn, which was 14.7% lower than in 2019 Q3.

Overall, the BoE revealed the outstanding value of all residential mortgage loans was £1,527.3bn at the end of Q3, which was a total 2.9% higher than a year earlier.

Hargreaves Lansdown personal finance analyst, Sarah Coles, commented: “The fire that has been lit under the property market is showing no signs of going out. Mortgage lending took some time to warm up after being frozen for weeks in the spring, but now it’s red hot. The value of agreed lending has reached the same level as the peak of the market before the financial crisis.

“However, lenders are still pretty wary. They’re trying to put the brakes on the market by upping mortgage rates – so the spread between the base rate and mortgage rates has been wider in 2020. They’re also less keen to lend to people borrowing a large percentage of the purchase price.”

The BoE’s data also showed the share of gross advances with interest rates less than 2% above the Bank Rate was 74.2% in 2020 Q3 – a level 10.0 percentage points lower than a year ago. The share of mortgages advanced in 2020 Q3 with LTV ratios exceeding 90% was 3.5%, and the BoE confirmed that this was 2.4 percentage points lower than a year earlier.

“If you’re planning to join the ‘race for space’, and trading up a larger property further out of town, then as long as you have a strong credit rating and reasonable equity in the property, mortgage lending should be relatively easy to secure,” Coles added.

“However, it’s worth bearing in mind that the lenders themselves aren’t convinced prices are going to keep rising at this rate. So now is not a brilliant time to pay over-the-odds for hot property.”

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