Valuation and breaks
In January 1998, ‘other specialist lenders’ were redefined to exclude lending by institutions in the Channel Islands and Isle of Man, as these were now classified as non-residents. Flows have been adjusted for the change in sector. Levels data however are not break-adjusted.
Building societies' statistical reporting transitioned from the Financial Services Authority to the Bank of England on 1 January 2008, and some minor changes to the calculation of lending to individuals have been implemented. The effects of these have been removed from the flows data, and are small in terms of the amounts outstanding.
In order to protect the confidentiality of reporting institutions’ data, we discontinued the publication of separate series for banks and building societies from January 2010. Instead, series for monetary financial institutions have been added, as well as ‘of which mutuals’ series, in most cases. Mutually owned institutions' published statistics were discontinued with effect from December 2013 data. For more information, see Statistics article ‘Changes to publication of data for mutually owned monetary financial institutions’.
Before 2010, securitisations and loan transfers to UK residents were recorded in Monthly acquisitions of mortgage and consumer credit portfolios (Table A5.7), but any securitisations or transfers to non-residents were only footnoted in the relevant tables Lending Secured on Dwellings (Table A5.3) and Consumer credit excluding student loans (Table A5.6). From 2010 data onwards, all securitised loans are reported on balance sheet. As a result, Monthly acquisitions of mortgage and consumer credit portfolios (Table A5.7) reflects only true loan sales to UK residents from 2010 to March 2015 data. From April 2015 data onwards, all loan transfers are footnoted in Total lending to individuals excluding student loans (Table A5.2), Lending secured on dwellings (Table A5.3) and Consumer credit excluding student loans (Table A5.6) and Monthly acquisitions of mortgage and consumer credit portfolios (Table A5.7), which is no longer updated.
Similarly, before 2010, loans securitised with UK resident special purpose vehicles were included as lending by other specialist lenders. Since 2010, these securitised loans have been reported on the balance sheets of the originating MFIs. This caused a level shift in various series in January 2010, as well as changing the coverage of various series from January 2010 data onwards. For more details, see Statistics article ‘Statistical reporting of securitisations’.
Hence, Monthly acquisitions of mortgage and consumer credit portfolios (Table A5.7) should be used in conjunction with Lending secured on dwellings (Table A5.3) and Consumer credit excluding student loans (Table A5.6) when analysing the data by type of lending institution for the period January 2010 to March 2015.
Further detail about the reporting of securitisations before 2010 is available in the Statistics article ‘Impact of securitisations and loan transfers activity on M4 lending’.
Before 2008, building societies’ gross lending was made up of loans fully secured on residential property and other loans fully secured on land to individuals. Before October 1998, this was defined as Class 1 and Class 2 sterling lending to individuals excluding mortgage portfolios acquired by UK building societies:
- Class 1 lending referred to sterling advances made by UK building societies to UK individuals where the advances are secured on dwellings for the purchase of property. In addition, a Class 1 advance had to be the first charge on the property.
- Class 2 lending referred to sterling advances made by building societies to individuals, secured on dwellings other than by a first charge. This may have included lending which was not for the purchase of property, but excluded bridging loans.
Since January 2008, second-charge mortgages have been excluded from other specialist lenders’ secured lending data.
Net lending figures reflect the impact of acquisitions/disposals of mortgages or consumer credit portfolios (see Monthly acquisitions of mortgage and consumer credit portfolios (Table A5.7) and include sterling bridging loans made by banks and other specialist lenders from April 1993, and by building societies from January 2008.
In April 2004, a population review of other specialist mortgage lenders was undertaken (for more information, see the Statistics article 'Population review for other specialist mortgage lenders'). In April 1993, the definition of bank ‘lending for house purchase’ changed to cover all lending which is fully secured by a first charge on a residential property. Thus it corresponded more closely to ‘Class 1’ lending by building societies (more details are available on pages 316-317 of the August 1992 Quarterly Bulletin, available via National Archives or directly upon request to the Bank). The net effect was to boost lending for ‘house purchase’. Net lending figures were, however, adjusted to exclude the estimated effect of this redefinition. The amount of outstanding bank lending to individuals which is secured on dwellings but not included in the above definitions totalled at least £1,269 million at end-1993, £1,051 million at end-1994 and £853 million at end-1995 (the figures may not be comprehensive). This series, for example, includes some lending arising from schemes such as specialised ‘mortgage equity extraction’ products.