Mortgage Lenders and Administrators Statistics - 2023 Q1

Mortgage Lenders and Administrators Statistics: 2023 Q1

Key findings

• The outstanding value of all residential mortgage loans was £1,675.4 billion at the end of 2023 Q1, 2.7% higher than a year earlier, but a decrease on the previous quarter for the first time since 2017 Q2 (Table A).¹
• The value of gross mortgage advances in 2023 Q1 was £58.8 billion, which was £22.9 billion lower than the previous quarter, and 23.6% lower than in 2022 Q1. This was the lowest observed since 2020 Q2 (Table A and Chart 1).
• The value of new mortgage commitments (lending agreed to be advanced in the coming months) in 2023 Q1 was 16.1% less than the previous quarter and 40.7% less than a year earlier, at £48.9 billion. This was also the lowest observed since 2020 Q2 (Table A and Chart 1).
• The share of gross mortgage advances with interest rates less than 2% above Bank Rate was 93.9% in 2023 Q1, 7.7 percentage points (pp) higher than a year ago and the highest seen since 2008 Q2 (Chart 2).
• The share of gross mortgage advances in 2023 Q1 with loan to value (LTV) ratios exceeding 90% was 4.0%, broadly unchanged from a year earlier but a 1.1pp decrease compared to the previous quarter (Chart 3).
• The proportion of lending to borrowers with a high loan to income (LTI) ratio decreased by 5.6pp on the quarter to 43.7% in 2023 Q1, the lowest seen since 2020 Q2 (Chart 4).
• The share for house purchase for owner occupation was 50.1%, down 0.6pp from 2022 Q1 and the lowest since 2020 Q2. The share of gross advances for remortgages for owner occupation was 34.8%, an increase of 5.8pp since 2022 Q1, and the highest observed since 2020 Q2. The share for buy-to-let purposes was 9.8%, the lowest observed since 2011 Q4 (Chart 5).
• The value of outstanding balances with arrears increased by 9.5% over the quarter and 12.5% over the year, to £14.9 billion in 2023 Q1, and now accounts for 0.89% of outstanding mortgage balances (Chart 6).

Table A: Residential loans to individuals, flows and balances

Regulated and non-regulated mortgages *

£ billions

Not seasonally adjusted

• The share of gross mortgage advances with interest rates less than 2% above Bank Rate was 93.9% in 2023 Q1, 0.2pp higher than last quarter. This was 7.7pp 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 3.4% from 3.8%, while the share of advances with interest rates 3% or more above Bank Rate increased by 0.2pp to 2.7% from 2022 Q4.^5,6

• The share of advances with LTV ratios exceeding 90% decreased on the quarter, by 1.1pp, to 4.0% in 2023 Q1. This was approximately the same as a year earlier (Chart 3).⁷ Within this, the share of mortgages advanced with LTVs over 95% was 0.2%, broadly unchanged compared to the previous quarter.⁸
• The share of mortgages advanced in 2023 Q1 with LTV ratios exceeding 75% decreased by 4.5pp on the quarter to 32.5%. This is 3.0pp lower than a year earlier and the lowest since 2016 Q1.⁹ 

• The proportion of lending to borrowers with a high loan to income (LTI) ratio decreased by 5.6pp on the quarter to 43.7% in 2023 Q1, 6.0pp lower than a year earlier, and lowest observed since 2020 Q2 (Chart 4).¹⁰ Borrowers with high LTI are defined here as:
  1. Borrowers with single income who had a LTI ratio of 4 or above. These loans accounted for 9.1% of gross mortgage lending in 2023 Q1, a 1.5pp decrease compared to the previous quarter.¹¹
  2. Borrowers with a joint income who had a LTI of 3 or above. These loans accounted for 34.6% of gross mortgage lending in 2023 Q1, a 4.2pp decrease 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 9.8% in 2023 Q1, a fall of 3.6pp from 2022 Q1 and the lowest observed since 2011 Q4 (Chart 5). The share of advances to owner occupiers was 90.2%.^13,14
• Of the 90.2% of advances for owner occupiers, the share for remortgages was 34.8%, an increase of 5.8pp since 2022 Q1, and the highest observed since 2020 Q2. The share for house purchase was the lowest observed since 2020 Q2, at 50.1%, down 5.2pp on the previous quarter and down 0.6pp from 2022 Q1. Further advances and other mortgages (including lifetime mortgages) accounted for 5.3% of gross advances in total, the lowest observed since recording began.^15,16,17
• Of the 50.1% of advances for house purchases by owner occupiers, lending to first-time buyers was 1.3pp higher than in 2022 Q1, at 22.7% of gross advances, but was 1.5pp lower than 2022 Q4. The share advanced to home movers decreased by 1.9pp on a year earlier, to 27.4%, and was 3.8pp lower than 2022 Q4. This was also the lowest observed since 2020 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) increased by 9.5% on the quarter and 12.5% on a year earlier, to £14.9 billion. This was the highest seen since 2021 Q1 (Chart 6).²⁰
• The proportion of total loan balances with arrears increased on the quarter from 0.81% to 0.89%.²¹ 

Appendix

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

⁴Table 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 Calculated as 100% of all mortgages less those <= 75% LTV (Table 1.31 sub table C row 21 - 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 Calculated as 100% of all mortgages less those for buy-to-let purposes (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: 12 September 2023

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