"The experience of lockdown and subsequent desire for more space, combined with the stamp duty holiday and record low interest rates, have persuaded many to take the plunge and move."
However, new lending commitments for 2020 in total was £268 billion, down 4.7% on 2019.
The share of new mortgage lending with LTVs over 90% was 1.2% in Q4, 4.5pp lower than a year earlier and the lowest level since these statistics began in 2007, as high-LTV mortgage availability remained low.
The proportion of lending to borrowers with a high loan to income ratio increased by 2.0pp on the quarter to 50.2%, the highest since the series began.
The Bank of England defines high-LTI borrowers as those with a single income who had a LTI ratio of 4 or above, which accounted for 11.3% of gross mortgage lending in Q4, or borrowers with a joint income who had a LTI of 3 or above, which accounted for 38.9% of gross lending.
The share of purchases for owner occupation was 63.9%, up 11.8pp from Q4 2019. Of this figure, lending to first-time buyers was 2.9pp higher than a year ago, at 24.3%.
The share advanced to home movers increased by 8.9pp on a year earlier, to 39.6%, the highest share for home movers since 2010. Remortgaging totalled 18.5%, a decrease of 10.7pp since Q4 2019.
The value of outstanding balances with some arrears increased by 3.4% over the quarter to £14.3 billion, and now accounts for 0.93% of outstanding mortgage balances.
Mark Harris, chief executive of mortgage broker SPF Private Clients, commented: "With new mortgage commitments 24.2 per cent higher than a year earlier and at their highest level since 2007, the Bank of England figures illustrate the strength of the uptick in the housing market as we headed towards the end of the year. The experience of lockdown and subsequent desire for more space, combined with the stamp duty holiday and record low interest rates, have persuaded many to take the plunge and move.
"High loan-to-value mortgages were harder to come by as lenders reined back on 90 per cent and above. The government’s decision to introduce a mortgage guarantee to encourage lenders to offer 95 per cent mortgages once more will make a difference to first-time buyers and others who simply can’t raise a significant deposit."
