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FCA mortgage lending stats

ended 13. September 2022

Brokers, can you whizz across some feedback on these new FCA stats sharpish? 

Key findings

  • The outstanding value of all residential mortgage loans was £1,648 billion at the end of 2022 Q2, 3.8% higher than a year earlier (Table A).
  • The value of gross mortgage advances in 2022 Q2 was £77.9 billion, which was £1.0 billion greater than the previous quarter, but 12.6% lower than in 2021 Q2 (Table A and Chart 1).
  • The value of new mortgage commitments (lending agreed to be advanced in the coming months) in 2022 Q2 was 1.7% greater than the previous quarter but 2.6% less than a year earlier, at £83.9 billion (Table A and Chart 1).
  • The share of gross advances with interest rates less than 2% above Bank Rate was 89.9% in 2022 Q2, 33.7 percentage points (pp) higher than a year ago, and the highest seen since 2008 Q3. The increase was mostly driven by the 50 basis points (bp)  increase in Bank Rate across the quarter, rather than any significant change in mortgage interest rates (Chart 2). See the Bank of England’s Effective Interest Rates data.
  • The share of mortgages advanced in 2022 Q2 with loan to value (LTV) ratios exceeding 90% was 4.5%, 2.4pp higher than a year earlier and the highest seen since 2020 Q2 (Chart 3).
  • The share for house purchase for owner occupation was 52.4%, up 1.7pp on the previous quarter, but down 14.0pp from 2021 Q2. The share of gross advances for remortgages for owner occupation was 27.0%, an increase of 10.5pp since 2021 Q2, but a decrease of 2.0pp since 2022 Q1 (Chart 5).
  • The value of outstanding balances with arrears decreased by 0.7% over the quarter and 7.2% over the year, to £13.2 billion in 2022 Q2, and now accounts for 0.80% of outstanding mortgage balances, the lowest since recording began in 2007 (Chart 6).

2 responses from the Newspage community

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Editor
Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
These figures show that the rate of mortgage lending is beginning to slow as mortgage lending has not increased at the same rate as house values over the past 12 months. This is unsurprising as the economy is starting to slow and recession is around the corner. It is good to see that mortgage arrears are reducing. Homeowners have been tested on their affordability since the financial crisis of 2008 so I am unsurprised this is stagnant. Even with interest rates rising, I wouldn't expect a significant increase in these rates.
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
I don't think these figures hold any real surprises. After two years of off-the-chart house price growth and a massive surge in people moving home, the fact that mortgage borrowing has risen is a bit of a given. The value of mortgages in arrears falling is good news, although the biggest challenges are possibly yet to come, so it'll be interesting to look at this figure again in twelve months' time.