The latest Bank of England Mortgage Lenders and Administrators Statistics paint a picture of a housing market that is gradually regaining momentum after a challenging year defined by high interest rates and stretched affordability. With mortgage activity rising and new lending pipelines strengthening, industry experts have been quick to assess what the figures signal for borrowers, lenders and the wider property market.
Industry experts from across the mortgage and property sector have shared their views.
Ian Futcher, financial planner at Quilter:
“Mortgage lending has picked up meaningfully in the latest figures, but it’s important to remember this comes after a very slow year in the housing market. High interest rates and affordability pressures kept many would-be buyers on the sidelines.
Gross mortgage advances jumped by almost 37% compared to the previous quarter and are now nearly a quarter higher than a year ago, while new mortgage commitments reached their highest level since late 2022. That suggests growing confidence as mortgage rates inch down and people begin to move forward with plans they may have paused.
Even so, the data shows how tough it remains for those trying to buy. Lending at over 90% loan-to-value has risen to its highest share since before the financial crisis, and a rising proportion of borrowers are stretching their incomes further to secure a home. This reflects the reality of high house prices and the lingering impact of elevated borrowing costs.
There is some reassuring news, with mortgage arrears still very low and falling versus last year, indicating that households who already have mortgages are largely managing repayments despite the squeeze.
Overall, the market is improving from a weak base, but affordability challenges remain front and centre, particularly for first-time buyers. Continued reductions in mortgage rates will be key to ensuring this recovery is sustainable rather than reliant on people taking on greater financial strain.”
Richard Pike, Chief Sales and Marketing Officer at Phoebus Software, in reaction to this morning’s Q3 Mortgage Lenders and Administrators Statistics.
“These figures demonstrate the mortgage market was in rude health over the summer, with overall lending up for the seventh consecutive quarter. Gross advances saw the largest quarterly increase for five years as borrowers took advantage of falling rates following the Bank of England’s base rate cut in August. New mortgage commitments were also at their highest since Q3 2020, showing a strong pipeline for lenders for the rest of the year.
Just under half of this lending (44.7%) was to borrowers with high loan-to-income ratio as mortgage companies offer more low deposit products. This is opening the possibility of home ownership to more people and stimulating market activity but comes with higher risk. The fact that arrears rates are continuing to fall suggests that lenders are getting the balance right here, and demonstrates the resilience of households in the face of cost-of-living pressures.
It will be interesting to see next quarter’s figures when we’ll see how the uncertainty leading up to the Budget affected borrower behaviour.”
