Total residential mortgage loans value rises 3.9% in Q3

The outstanding value of all residential mortgage loans was £1.486bn in the third quarter of 2019, 3.9% higher than a year earlier, according to new data published by the Bank of England (BoE) and the FCA.

The latest Mortgage Lenders and Administrators Statistics for 2019 Q3 also revealed that the value of gross mortgage advances was £73.3bn, which was generally unchanged compared to 2018 Q3.

The value of new mortgage commitments, which considers lending agreed to be advanced in the coming months, was 1.1% higher than a year earlier, at £73.8bn, while the BoE’s figures showed the share of mortgages advanced in Q3 with LTV ratios exceeding 90% had increased to 5.9%. Lending in this LTV bracket has been announced at its highest since 2008 Q4.

Furthermore, the share of gross mortgage lending for BTL purposes was 12.3%, a level that was consistent with 2018 Q3, while the value of outstanding balances with some arrears fell significantly – to £13.7bn – and now accounts for 0.92% of outstanding mortgage balances.

Commenting on the figures, Spicerhaart Corporate Sales managing director, Mark Pilling, said: “The Q3 arrears figures from BoE are encouraging, especially given the current political situation. It just shows that no matter what is going on in Westminster, people are looking after their own affairs and trying to stay on top of things.

“The trend for higher LTV mortgages is always a concern, as we head into uncharted waters next year. There is no way, at the moment, to predict what will happen in the economy when, and if, Brexit is completed – and there is a real risk that interest rates will rise.

“With this in mind, it is more important than ever for lenders to ensure long term affordability. We do not want to find ourselves back in a situation where repossessions begin to rise and people lose their homes.”

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