Mortgage Lenders and Administrators Statistics - 2022 Q3

Mortgage Lenders and Administrators Statistics: 2022 Q3

Key findings

• The outstanding value of all residential mortgage loans was £1,667.1 billion at the end of 2022 Q3, 4.1% higher than a year earlier (Table A).¹
• The value of gross mortgage advances in 2022 Q3 was £85.9 billion, which was £8.0 billion greater than the previous quarter, and 17.0% higher than in 2021 Q3 (Table A and Chart 1).
• The value of new mortgage commitments (lending agreed to be advanced in the coming months) in 2022 Q3 was 4.5% greater than the previous quarter and the highest value recorded since 2007 Q3 (Table A and Chart 1).
• The share of gross mortgage advances with interest rates less than 2% above Bank Rate was 93.0% in 2022 Q3, 35.7 percentage points (pp) higher than a year ago, and the highest observed since 2008 Q2 (Chart 2).
• The share of gross mortgage advances in 2022 Q3 with loan to value (LTV) ratios exceeding 90% was 5.0%, 0.9pp higher than a year earlier and the highest seen since 2020 Q1 (Chart 3).
• The proportion of lending to borrowers with a high loan to income (LTI) ratio increased by 1.0pp on the quarter to 51.5% in 2022 Q3, the same as 2021 Q2 and the highest since recording began in 2007 (Chart 4).
• The share for house purchase for owner occupation was 56.1%, up 3.7pp on the previous quarter, but down 2.7pp from 2021 Q3. The share of gross advances for remortgages for owner occupation was 24.9%, an increase of 2.0pp since 2021 Q3, but a decrease of 2.1pp since 2022 Q2 (Chart 5).
• The value of outstanding balances with arrears decreased by 1.4% over the quarter and 5.1% over the year, to £13.1 billion in 2022 Q3, and now accounts for 0.78% of outstanding mortgage balances, the lowest since recording began in 2007 (Chart 6).
  

Table A: Residential loans to individuals, flows and balances

Regulated and non-regulated mortgages *
£ billions
Not seasonally adjusted

Graphical Analysis:

• The value of gross mortgage advances in 2022 Q3 was £85.9 billion, which was £8.0 billion greater than the previous quarter, and 17.0% higher than in 2021 Q3 (Table A and Chart 1).²
• The value of new mortgage commitments (lending agreed to be advanced in the coming months) in 2022 Q3 was 4.5% greater than the previous quarter and 11.2% greater than a year earlier, at £87.8 billion. This was also the highest value recorded since 2007 Q3 (Table A and Chart 1).³
  

• The share of gross mortgage advances with interest rates less than 2% above Bank Rate was 93.0% in 2022 Q3, 1.6pp higher than last quarter. This was also 35.7pp higher than a year ago, and the highest seen since 2008 Q2 (Chart 2).⁴
• The share of advances with interest rates between 2% and 3% above Bank Rate decreased over the quarter to 4.2% from 5.3%, while the share of advances with interest rates 3% or more above Bank Rate decreased by 0.5pp to 2.8% from 2022 Q2.^5,6

• The share of advances with LTV ratios exceeding 90% increased on the quarter, by 0.6pp, to 5.0% in 2022 Q3. This was 0.9pp higher than a year earlier, and the highest seen since 2020 Q1 (Chart 3).⁷ Within this, the share of mortgages advanced with LTVs over 95% was 0.2%, broadly unchanged compared to the previous quarter.⁹
• The share of mortgages advanced in 2022 Q3 with LTV ratios exceeding 75% increased by 0.2pp on the quarter to 38.4%. This is 1.9pp lower than a year earlier.⁸

• The proportion of lending to borrowers with a high loan to income (LTI) ratio increased by 1.0pp on the quarter to 51.5% in 2022 Q3, also 3.0pp higher than a year earlier. This was broadly the same as 2021 Q2 and the highest since recording began in 2007 (Chart 4).¹⁰ Borrowers with high LTI are defined here as:
  • Borrowers with single income who had a LTI ratio of 4 or above. These loans accounted for 11.2% of gross mortgage lending in 2022 Q3, a 0.1pp decrease compared to the previous quarter.¹¹
  • Borrowers with a joint income who had a LTI of 3 or above. These loans accounted for 40.3% of gross mortgage lending in 2022 Q3, a 1.1pp increase compared to the previous quarter.¹²

• The share of gross mortgage advances for buy-to-let purposes (covering house purchase, remortgage and further advance) was 12.5% in 2022 Q3, a fall of 1.2pp on the previous quarter but an increase of 0.6pp from 2021 Q3 (Chart 5). The share of advances to owner occupiers was 87.5%.^13,14
• Of the 87.5% of advances for owner occupiers, the share for remortgages was 24.9%, an increase of 2.0pp since 2021 Q3, but a decrease of 2.1pp since 2022 Q2. The share for house purchase was 56.1%, up 3.7pp on the previous quarter but down 2.7pp from 2021 Q3. Further advances and other mortgages (including lifetime mortgages) accounted for 6.4% of gross advances in total.^15,16,17
• Of the 56.1% of advances for house purchases by owner occupiers, lending to first-time buyers was 1.0pp lower than in 2021 Q3, at 23.3% of gross advances, but was 0.9pp higher than 2022 Q2. The share advanced to home movers decreased by 1.7pp on a year earlier, to 32.9%, but was 2.9pp higher than 2022 Q2.^18,19

• The value of outstanding balances with arrears (defined as the borrower failing to make contractual payments equivalent to at least 1.5% of the outstanding mortgage balance or where the property is in possession) decreased by 1.4% on the quarter and 5.1% on a year earlier, to £13.1 billion, the lowest it has been since recording began in 2007 (Chart 6).²⁰
• The proportion of total loan balances with arrears decreased on the quarter from 0.80% to 0.78%, also the lowest since recording began.²¹

Appendix

Below is a list detailing where the information in the statistics release can be found in the detailed table:

¹ Table 1.11 sub table A row 9

² Table 1.21 sub table C row 1

³ Table 1.21 sub table C row 3

⁴ Table 1.22 sub table C row 3 (less than 2% above)

⁵ Table 1.22 sub table C row 4 (2.00% to 2.99% above)

⁶ Table 1.22 sub table C row 5 + row 6 (3% or more above)

⁷ Table 1.31 sub table C row 19 + row 20

⁸ 100% - Table 1.31 sub table C row 17

⁹ Table 1.31 sub table C row 20

¹⁰ Table 1.31 sub table C row 5 + row 13

¹¹ Table 1.31 sub table C row 5

¹² Table 1.31 sub table C row 13

¹³ Table 1.33 sub table C row 4 (buy-to-let)

¹⁴ 100% - Table 1.33 sub table C row 4 (owner-occupation)

¹⁵ Table 1.33 sub table C row 6 (remortgage)

¹⁶ Table 1.33 sub table C row 2 + row 3 (house purchase owner occupation)

¹⁷ Table 1.33 sub table C row 5 + row 9 (further advance and other)

¹⁸ Table 1.33 sub table C row 2 (first-time buyers)

¹⁹ Table 1.33 sub table C row 3 (home movers)

²⁰ Table 1.7 sub table C row 10

²¹ Table 1.7 sub table C row 11

Queries

If you have any comments or queries about this release please email mlar@bankofengland.co.uk.

Next release date: 14 March 2023