BoE: Outstanding value of residential mortgage loans up 3.8%

The outstanding value of all residential mortgage loans was £1.499bn at the end of 2019, which is a year-on-year increase of 3.8% according to the latest Bank of England Mortgage Lenders and Administrators Statistics. The value of gross mortgage advances was £73.4bn which remains broadly unchanged in comparison to Q4 2018. New mortgage commitments, or lending agreed to be advanced in the coming months, was 4% higher than in 2018 at £70.6bn. The share of mortgages advanced in Q4 2019 with LTV ratios exceeding 90% reached 5.7%, which is a rise on figures recorded the year previously. The share of gross mortgage lending for buy-to-let purposes was 12.4%. The value of outstanding balances with 'some' arrears fell by 2.1% over the quarter to £13.4bn, and now accounts for 0.89% of outstanding mortgage balances.

Mark Pilling, corporate sales managing director at Spicerhaart, said: “The Q4 arrears figures from the Bank of England are broadly positive, showing another fall on the back of previous quarters.

“There was also a small drop in high LTV mortgages and high loan-to-income ratios – although single-income borrowers with an LTI ratio above four actually rose slightly, which could be a cause for concern.

“With the coronavirus Covid-19 already beginning to cause real disruption to businesses and people’s livelihoods, it remains important that lenders have a flexible attitude and continue to seek outcomes that are right for customers.

"There is a strong likelihood that arrears will rise as a result of the virus, and the measures imposed to slow down its spread.

"Lenders need to be ready for a situation where people are facing real financial difficulties through no fault of their own.”