The share of lending for remortgage was 1.4% higher than a year earlier, at 31.1%. The share for house purchase was 1% lower, at 63.5%.
The value of gross mortgage advances grew 5.5% in the year to 2018 Q4 to £72.9bn,the Bank of England’s mortgage lending and administration statistics found.
The share of lending for remortgage was 1.4% higher than a year earlier, at 31.1%. The share for house purchase was 1% lower, at 63.5%.
Some 4.4% of mortgages advanced in Q4 had loan-to-valueratios exceeding 90%, compared to 3.8% a year earlier.
Keith Haggart, managing director at lifetime mortgage provider Responsible Lending, said: “Buyers are stuffing their pockets while they can, with the proportion of high loan-to-income loans higher than at any time since 2007.
“Low interest rates are responsible for this, and cheap borrowing continues to trump economic outlook when it comes to borrowers’ appetite to forge ahead.
“Remortgages are taking an increasing slice of the pie and that’s to be expected because we already know transaction volumes remain on the floor by historic standards.
“Volume of sales will have to improve before this trend moves back in the other direction but it is owner-occupiers whose activity remains sluggish. First-time buyers have not been deterred from the market at all.
“They are going to be on the ladder for longer and clearly believe property is still a rock solid investment over the long term.”
The outstanding value of all residential mortgage loans was £1,442bn in 2018 Q4, up 3.3% year-on-year.
The value of new mortgage commitments, lending agreed to be advanced in the coming months, was £68bn, up 4.6% year-on-year.
As a component of lending for house purchase, the percentage of lending to home movers fell 0.9% in the year to Q4, to 29.7% of gross advances.
The other two components were broadly unchanged in the year with 21.2% of lending to first-time buyers and 12.5% for buy-to-let purchases
The proportion of high loan-to-income (LTI) lending, loans greater than four times the value of annual income for a single buyer or greater than three times the annual income for joint buyers, remained at 46.9% in Q4, its highest value since the series began in 2007 Q1
The value of outstanding balances with some arrears fell slightly in the quarter to £14.4bn. As a proportion of total balances it has remained at 1.0%.
Mark Pilling, Spicerhaart Corporate Sales managing director, added: “The latest mortgage lenders and administrators’ statistics reveal that the proportion of total loans in arrears has continued to fall, and is down 0.5% in the quarter to £14.4bn while the proportion of total loan balances in arrears has continued to remain at 1.0% which is the lowest since the series began in 2007.
“And while it is good news that arrears remain historically low, there is a danger that people could start to struggle, post-Brexit, with predictions from Kensington this week that a no-deal Brexit could see arrears rise by a third.
“Arrears and possessions - currently at a 40-year low – remain low, not necessarily because people are no longer experiencing financial difficulties but because lenders are now doing everything, they can to help borrowers who are struggling or may struggle in the future to avoid going down the repossession route.
“Therefore, to continue to keep possessions down throughout this period of uncertainty, it is important that lenders look at all the cases on their books and find ways to help any borrowers who are either already having difficulties managing their mortgage or have concerns that affordability could become an issue down the line.
“We work closely with lenders to manage their arrears and repossessions, to find solutions that best suit them and their customers. We would encourage lenders to look at all the cases on their books and if they have concerns about borrowers, either now, or in a post-Brexit world, to speak to them sooner rather than later in order to look at possible options.”
