The value of gross mortgage advances in the fourth quarter of 2020 was £76.6bn, a figure 4.2% higher than in 2019 Q4, new figures from the Bank of England (BoE) have revealed.

However, the data showed that total advances across the whole of 2020 fell by 9.8%, to a value of £249bn.

The BoE numbers also revealed the value of new mortgage commitments – which measures lending agreed to be advanced in the coming months – reached a level 24.2% higher than a year earlier, at £87.7bn. This was the most since before the onset of the financial crisis and the highest level since 2007 Q3.

Overall, the outstanding value of all residential mortgage loans was £1,541.4bn at the end of 2020, a figure 2.9% higher than a year earlier.

Twenty7Tec director, Phil Bailey, suggested the BoE’s figures show an “ongoing demand and need” for mortgages in the UK.

“Broker activity in 2021 is already reaching new highs over the previous year, even prior to the pandemic,” Bailey said. “The growing number of available mortgage products in the market is also showing the increased confidence lenders have, reaching their highest level since pre-COVID.

“We expect this appetite and increased demand to continue as buyers, home movers and even lenders look for one more chance to benefit from the stamp duty reduction.”

The Bank’s data showed the share of mortgages advanced in 2020 Q4 which have LTV ratios exceeding 90% had fallen to 1.2%. This was a level down by 4.5 percentage points from the final quarter of 2019 and the lowest level since these statistics from the BoE began in 2007.

Furthermore, the share of gross advances with interest rates less than 2% above the BoE’s base rate was 64.8% in 2020 Q4. The Bank confirmed this figure was 20.5 percentage points lower than a year ago.

Hargreaves Lansdown personal finance analyst, Sarah Coles, added: “The mortgage market was booming at the end of last year, and the mortgages being agreed for the start of 2021 were at their highest for 14 years. This was even before the stamp duty holiday extension, which is likely to have brought more reluctant buyers back to the fray.

“But not everyone is enjoying this boom. If you need a mortgage with a high LTV, deals are thinner on the ground than they have been at any time since 2007. In this context, you can understand why the government decided to step in and offer guarantees for high LTV mortgages.”

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