Residential mortgage market value shows 3.9% annual growth in Q1

The outstanding value of all residential mortgages loans was £1.51bn at the end of the first quarter of the year, a figure 3.9% higher than a year ago, according to new Bank of England (BoE) figures.

The BoE’s latest release, Mortgage Lenders and Administrators Statistics - 2020 Q1, also revealed the value of gross mortgage advances in the first quarter was £65.8bn, a rise of 3.8% from the first quarter of 2019, while the value of new mortgage commitments – lending that is agreed to be advanced in the coming months – was 6.1% higher than a year earlier, at £67.6bn.

For mortgages with loan-to-value (LTV) ratios exceeding 90% advanced in the year’s opening quarter, the share was 5.2%, an increase of 0.7 percentage points compare to a year ago. The data also revealed that the share of gross mortgage lending for buy-to-let purposes – covering house purchase, remortgage and further advance – was 14.0%, a figure unchanged from 2019’s first quarter.

Furthermore, the value of outstanding balances with some arrears increased by 1.8% over the quarter to £13.7bn, and the BoE stated these now account for 0.91% of outstanding mortgage balances.

Commenting on the latest statistics from the BoE, Legal & General Mortgage Club director, Kevin Roberts, said: “The housing market clearly enjoyed something of a boost in demand during the opening months of 2020.

“After the uncertainty of the General Election, borrowers were pressing ahead with house purchases and thousands of homeowners continued to seek out the support of independent mortgage advisers to lock into new deals. There is reason to suggest that this demand still exists despite the so-called ‘Boris Bounce’ fizzling out in the face of COVID-19 and the lockdown.
“Property website, Rightmove, recorded its busiest day ever on 27 May and last week adviser searches for purchase mortgages reached a 2020 high. After initially withdrawing products, lenders are also carefully starting to return to higher loan-to-value mortgages – products that are vital to helping people with smaller deposits step onto and up the housing ladder.

“However, we are living in uncertain times and there will be borrowers unsure about whether to take their housing plans forward.”

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