Residential mortgage lending down 5.6%: BoE

The latest MLAR data from the Bank of England - provided by around 340 regulated mortgage lenders and administrators - shows a fall in new residential mortgage lending activity in Q1 2017.

Related topics:  Mortgages
Rozi Jones
13th June 2017
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"Lenders have also seen a 5.1 percentage point fall in the value of new loans for house purchases from 66.0% to 60.9%, driven by a decrease in the first-time-buyer category."

£60.4bn of new residential loans was advanced to individuals during Q1 - a 3.8% decrease compared to the previous quarter and a decrease of 5.6% from Q1 2016.

It shows that at least some of the decline in new residential mortgage lending activity was due to a fall in new commitments which fell by 0.7% from £61.8bn in Q4 2016 to £61.4bn in Q1 2017.

From the previous quarter, lenders have also seen a 5.1 percentage point fall in the value of new loans for house purchases from 66.0% to 60.9%, driven by a decrease in the first-time-buyer category.

This is the lowest figure for house purchase since Q1 2012. On the other hand, lending to existing borrowers in the form of remortgages increased by 3.7 percentage points from 27.7% to 31.4%.

The release shows an increase in the proportion of low LTV loans which has also been attributed to an increased share of lending for remortgage purposes. New lending at below 75% LTV increased by 2.1 percentage points from the previous quarter to 67.2% in Q1 2017.

Since the first quarter of 2016, the share of buy-to-let lending has stabilised at a lower level and accounted for 14.2% of residential home loans transactions in Q1 2017.

The proportion of total loan balances in arrears decreased to 1.26% at the end of Q1 2017, the lowest level since the series began.

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