"The number of people taking out fixed rates fell slightly from 84.1 per cent to 81.4 per cent in the first quarter, possibly down to the lack of a threat of an imminent rate rise."
Its Mortgage Lenders and Administrators Statistics show that the drop was driven by a decrease in average fixed rates of 6 bps to 2.66%.
The average interest rate on total amounts outstanding decreased by 3 bps to 3.04%, again the lowest rate recorded in this data series.
However the proportion of gross fixed rate lending fell from 84.1% in Q4 2015 to 81.4%.
Gross lending totalled £64 billion in Q1 2016 - 1.5% higher than in Q4 2015 and 40.4% higher annually.
Net lending increased from £6.3 billion in Q1 2015 to £13.6 billion in Q1 2016, an increase of 117.0% over the previous four quarters.
Buy-to-let lending increased from 15.9% to 21.1% on a quarterly basis, attributed largely to the impending stamp duty changes in Q1.
BTL advances (including remortgages) increased from £7.7 billion in Q1 2015 to a record high of £13.5 billion in Q1 2016.
However first-time buyers struggled in Q1, with the proportion of lending falling by 4% to 16.9%.
The proportion of gross advances above 90% LTV also decreased by 0.5% over the quarter to 2.7%, while borrowers with an income multiple of more than 4.00x fell to 9.5%.
The proportion of gross advances that are a combination of a LTV over 90% and LTI multiples of over 3.5x for single income borrowers (or 2.75x for joint income borrowers) decreased by 0.4% to 1.9% over the quarter.
Steve Griffiths, Head of Sales and Distribution at Kensington, commented: “With the buy-to-let spike, it’s no surprise that lending has increased again this quarter. Whilst a rise may sound encouraging, it’s important to recognise that these top-line figures do not give a full view of the market."
Mark Harris, CEO of SPF Private Clients, added: "Mortgage rates grow ever cheaper as lenders cut rates to attract business. The Bank of England reports that the number of people taking out fixed rates fell slightly from 84.1 per cent to 81.4 per cent in the first quarter, possibly down to the lack of a threat of an imminent rate rise. However, fixed rates are still by far the most popular mortgage product as the majority of borrowers are happy to achieve some security at historically very cheap rates."
