The value of new mortgage lending agreed to be advanced increased by 11.5% in Q1, to £78 billion, a 14.2% year-on-year increase. The value of gross mortgage advances decreased by 12.3% to £69.6 billion, 10.2% lower than a year earlier.
The figures were revealed in the Bank of England’s quarterly Mortgage Lenders and Administrators Return, which includes aggregated from data on mortgage lending activities provided by around 370 lenders and administrators.
The share of advances to owner occupiers was 91.1%, with gross mortgage advances for buy-to-let purposes at 8.9% – an increase of 0.5pp from the previous quarter and 0.8pp higher than a year earlier.
The share of gross advances for remortgages for owner occupation increased by 2.7pp from the previous quarter to 28.1%, and was 6.8pp higher than a year earlier.
The share of gross mortgage advances for house purchase for owner occupation decreased by 3.9pp from the previous quarter to 57.7%, and was 8.6pp lower than a year earlier. Lending to first time buyers decreased by 1.2pp from the previous quarter to 27.4%, and was 3.9pp lower than a year earlier.
The share advanced to home movers decreased by 2.7pp from the previous quarter to 30.3%, and was 4.6pp lower than a year earlier.
Rob Clifford, chief executive of Stonebridge mortgage and protection network, said the numbers are “a mirage”.
He explained: “It looks like a contraction and an expansion at the same time if you look at what happened to lending and new commitments in the first quarter, but these wild swings in the numbers are really just a mirage.
“Ignoring the annual figures this time around is the only way to take the temperature of the market, all thanks to a distortion last year.
“A stamp duty cliff edge had caused a rush of applications and lending, creating both flattering and unflattering year-on-year comparisons. However, there’s still plenty of momentum out there. In fact, despite the invasion of Iran in February, new mortgage approvals are holding their own and were up significantly the very next month, also rising year on year.
“Even if the unresolved situation in the Middle East and rising borrowing costs does dent new home purchases, we’re still in the midst of a remortgaging wave due to a pandemic boom in transactions five years ago, and this will smooth out the effect of any volatility for advisers who position themselves well in the coming months.”
Mary-Lou Press, NAEA Propertymark president, said the figures present a mixed picture of the market.
She commented: “While the value of gross mortgage advances fell during the quarter, the increase in new mortgage commitments suggests borrowing activity could strengthen in the months ahead.”
“It is encouraging to see a modest increase in the share of buy-to-let mortgage advances despite significant legislative changes affecting landlords across the UK. However, many property investors remain cautious about the impact of reforms such as the Renters’ Rights Act and the Housing (Scotland) Act, and it remains to be seen how these changes will influence investment decisions over the longer term.
“At the same time, ongoing cost-of-living pressures and global economic uncertainty continue to influence borrowing decisions. With the Bank of England’s next base rate decision approaching, the housing market will be watching closely for any impact on affordability, confidence and future market activity.”
