Commentary on Mortgage lending statistics Q1 2025

The value of gross mortgage advances increased by 12.8% from the previous quarter to £77.6 billion, the highest new advances since 2022 Q4, and was 50.4% higher than a year earlier (Table A and Chart 1).

The value of new mortgage commitments (lending agreed to be advanced in the coming months) decreased by 1.5% from the previous quarter to £68.2 billion, but remained 13.5% higher than a year earlier (Table A and Chart 1).

The share of gross mortgage advances with interest rates less than 2% above Bank Rate (including at or below Bank Rate) has stayed the same as the previous quarter at 96.4%, and was 0.3pp higher than a year earlier (Chart 2).

The share of advances with interest rates between 2% and up to 3% above Bank Rate has stayed the same as the previous quarter at 1.7%, and was 0.1pp higher than a year earlier. The share of advances with interest rates 3% or more above Bank Rate has stayed broadly consistent from the previous quarter at 1.9%, and was 0.4pp lower than a year earlier.

The share of gross mortgage advances with loan-to-value (LTV) ratios exceeding 90% increased by 0.4pp from the previous quarter to 6.7%, the highest since 2008 Q2, and was 1.5pp higher than a year earlier (Chart 3).

Within this, the share of mortgages advanced with LTVs over 95% has stayed the same as the previous quarter at 0.3%. This was the same as a year earlier.

The share of gross mortgage advances with loan-to-value (LTV) ratios exceeding 75% increased by 1.7pp from the previous quarter to 45.8%, the highest share since 2007 Q4, and was 7.8pp higher than a year earlier.

The proportion of lending to borrowers with a high loan to income (LTI) ratio decreased by 0.7pp from the previous quarter to 45.2%, but remained 5.5pp higher than a year earlier (Chart 4). Borrowers with high LTI are defined here as:

• Borrowers with single income who had a LTI ratio of 4 or above. This increased by 0.7pp from the previous quarter to 10.8%, and was 2.8pp higher than a year earlier.
   
• Borrowers with a joint income who had a LTI ratio of 3 or above. This decreased by 1.4pp from the previous quarter to 34.4%, but remained 2.7pp higher than a year earlier.

The share of gross mortgage advances for buy-to-let purposes decreased by 0.2pp from the previous quarter to 8.0%, and was 0.3pp lower than a year earlier (Chart 5). The share of advances to owner occupiers was 92.0%.

Of the 92.0% of advances for owner occupiers, the share of gross advances for remortgages for owner occupation decreased by 2.2pp from the previous quarter to 21.3%, and was 10.5pp lower than a year earlier. The share of gross mortgage advances for house purchase for owner occupation increased by 2.6pp from the previous quarter to 66.3%, the highest share since 2021 Q2, and was 11.7pp higher than a year earlier. Further advances and other mortgages (including lifetime mortgages) decreased by 0.3pp from the previous quarter to 4.4%, and was 0.9pp lower than a year earlier.

Of the 66.3% of advances for house purchases by owner occupiers, lending to first time buyers increased by 1.8pp from the previous quarter to 31.4%, the highest share since reporting began in 2007, and was 5.6pp higher than a year earlier. The share advanced to home movers increased by 0.8pp from the previous quarter to 34.9%, and was 6.1pp higher than a year earlier.

New arrears cases (as a proportion of total outstanding balances with arrears) decreased by 1.7pp from the previous quarter to 10.2%, and was 1.2pp lower than a year earlier. Arrears are defined as the borrower failing to make contractual payments where the balance owed is equivalent to at least 1.5% of the outstanding mortgage balance or where the property is in possession.

The value of outstanding mortgage balances with arrears decreased by 2.9% from the previous quarter to £21.5 billion, but remained 0.9% higher than a year earlier (Chart 6).

Of the £21.5 billion of outstanding mortgage balances with arrears, non-regulated mortgages (including buy-to-let loans and other residential lending to individuals where the property is not for use by the borrower or qualifying dependents) decreased by 2.4% from the previous quarter to £4.7 billion, and was 4.7% lower than a year earlier (Chart 6).

The proportion of the total mortgage loan balances with arrears, relative to all outstanding mortgage balances, has stayed broadly consistent from the previous quarter at 1.3%. This was the same as a year earlier.

The number of new possessions in 2025 Q1 increased by 12.3% from the previous quarter to 2,307, the highest since 2019 Q3, and was 10.0% higher than a year earlier.

The total stock of possessions increased by 7.2% from the previous quarter to 7,822, the highest since 2014 Q3, and was 29.7% higher than a year earlier.