The outstanding value of all residential mortgage loans at the end of Q4 2021 was £1,613.4bn, a figure 4.7% higher than the year before.

New figures published by the Bank of England (BoE) also confirmed that the value of gross mortgage advances in Q4 2021 was £70.2bn. This total was 8.4% lower than in Q4 2020, and the lowest level since Q3 2020.

The Bank’s figures showed that the share of mortgages advanced in Q4 2021 with LTV ratios exceeding 90% was 4.2%, which was 3.0 percentage points higher than a year earlier but broadly unchanged compared to the previous quarter.

In terms of lending agreed to be advanced in the coming months, the value of new mortgage commitments in Q4 2021 was 2.0% down on the previous quarter at £77.3bn, and 11.9% less than the recent peak of £87.7bn a year earlier.

Furthermore, the BoE figures showed that the share of gross advances with interest rates less than 2% above its base rate was 71.3% in Q4 2021, 6.5 percentage points higher than a year ago, and the highest seen since Q3 2020. The Bank highlighted that this increase was driven by the 15 basis point increase to the base rate last December, rather than any significant change in mortgage interest rates.

Commenting on the figures, Hargreaves Lansdown senior personal finance analyst, Sarah Coles, said: “We saw a remortgage renaissance at the end of last year, as property owners leapt through the window of opportunity to lock in a cheap deal for years before higher rates took hold.

“During the last three months of 2021, rate rise speculation took hold, so much so that the markets were surprised when the first rise was put off until December. Property owners realised that the era of cheap mortgages deals was coming to an end, so now was the time to get a new fixed rate deal while they were still around.

“Overall mortgage lending fell towards the end of the year, but we already know this was a blip because January figures have revealed buyers are still keen. Despite the recent rises, mortgage rates are still incredibly low, and with lockdown savings burning a hole in some people’s pockets, there are still compelling reasons to buy.”

For mortgages in arrears, the latest BoE figures also revealed that the value of outstanding balances with arrears decreased by 2.1% over the quarter to £13.5bn in Q4 2021, and now accounts for 0.84% of outstanding mortgage balances – the lowest since recording began in 2007.

Coreco managing director, Andrew Montlake, added: “It’s encouraging that arrears levels have decreased to their lowest level since recording began in 2007. This is almost certainly a result of the fact interest rates have been at rock bottom for so long and the jobs market has remained pretty robust, despite the pandemic.

“Unfortunately, we may see arrears rise in the months ahead as the BoE raises interest rates to contain inflation and the cost-of-living squeeze starts to bite. Unsurprisingly, there is a stampede to remortgage and lock into the lowest possible fixed rates at present, before rates inevitably increase further.”

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