The outstanding value of all residential mortgage loans in the UK was £1,601.2bn at the end of the third quarter, a figure 4.9% higher than a year ago, new Bank of England (BoE) figures have revealed.

According to the data, the value of gross mortgage advances in Q3 was £73.4bn, which was £15.6bn lower than the previous quarter, but 17.4% higher than the amount seen in Q3 2020.

The value of new mortgage commitments, which is lending agreed to be advanced in the coming months, was 8.2% less than the previous quarter in Q3, but the BoE stated this figure was broadly unchanged from a year earlier, at £78.9bn.

Furthermore, the share of gross advances with interest rates less than 2% above the BoE’s base rate was 57.3% in Q3 2021. This level was 16.9 percentage points lower than a year ago. The share of mortgages advanced in 2021 Q3 with LTV ratios exceeding 90% was 4.2%, 0.6 percentage points higher than a year earlier and a 2.1 percentage point increase compared to the previous quarter.

“The mortgage market is cooling, but there’s nothing to chill the blood in these figures,” commented Hargreaves Lansdown senior personal finance analyst, Sarah Coles.

“We can expect the mortgage market to grow colder this winter, and demand to drop further, as a result of the combination of the final end date for the stamp duty holiday, and the usual seasonal slowdown.

“However, it’s not going to freeze over. We can expect remortgage numbers to climb, and mortgages for purchases to hold up reasonably well. Despite some 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.”

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