Key findings
- The outstanding value of all residential mortgage loans was £1,584.1 billion at the end of 2021 Q2, 4.6% higher than a year earlier (Table A).footnote [1]
- The value of gross mortgage advances in 2021 Q2 was £89.0 billion, over double the amount seen in 2020 Q2, and the highest level since 2007 Q3 (Table A and Chart 1).
- The value of new mortgage commitments (lending agreed to be advanced in the coming months) was almost 2.5 times greater than a year earlier, at £85.6 billion, but £2.1 billion lower than the recent peak seen in 2020 Q4 (Table A and Chart 1).
- The share of gross advances with interest rates less than 2% above Bank Rate was 56.6% in 2021 Q2, 16.7 percentage points (pp) lower than a year ago (Chart 2).
- The share of mortgages advanced in 2021 Q2 with loan to value (LTV) ratios exceeding 90% was 2.0%, 2.8pp lower than a year earlier but a slight increase compared to the previous quarter (Chart 3).
- The share for house purchase for owner occupation was 66.4%, up 24.9pp from 2020 Q2. The share of gross advances for remortgages for owner occupation was 16.6%, a decrease of 21.3pp since 2020 Q2, and the lowest since these statistics began in 2007 (Chart 5).
- The value of outstanding balances with some arrears decreased by 6.3% over the quarter to £14.1 billion, 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
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | |
2020 | 2021 | |||||
Flows | ||||||
Gross advances | 65.8 | 44.1 | 62.5 | 76.6 | 83.3 | 89.0 |
New commitments | 67.3 | 34.4 | 78.9 | 87.7 | 77.5 | 85.6 |
Amounts outstanding | 1,507.7 | 1,513.8 | 1,526.0 | 1,541.4 | 1,561.8 | 1,584.1 |
*This data covers regulated mortgage lending, and non-regulated mortgage lending by firms which undertake regulated mortgage lending or administration of regulated mortgages.
Graphical analysis
- The value of gross mortgage advances in 2021 Q2 was £89.0 billion, just over double the amount seen in 2020 Q2, and the highest level since 2007 Q3 (Table A and Chart 1).footnote [2]
- The value of new mortgage commitments (lending agreed to be advanced in the coming months) was almost 2.5 times greater than a year earlier, at £85.6 billion, but £2.1 billion lower than the recent peak seen in 2020 Q4 (Table A and Chart 1).footnote [3]
Chart 1: Gross advances and new commitments
Not seasonally adjusted
Chart 2: Per cent of business above Bank Rate – Gross Advances
Not seasonally adjusted
- The share of gross advances with interest rates less than 2% above Bank Rate was 56.6% in 2021 Q2, 2.6pp lower than last quarter, 16.7pp lower than a year ago, and the lowest since 2016 Q4 (Chart 2).footnote [4]
- The share of advances with interest rates between 2% and 3% above Bank Rate slightly increased over the quarter to 29.1% from 29.0%, and the share of advances with interest rates 3% or more above Bank Rate increased by 2.5pp to 14.4% from 2021 Q1.footnote [5] footnote [6]
- The share of advances witt LTV ratios exceeding 90% increased on the quarter, by 0.9pp, to 2.0%. This is 2.8pp lower than a year earlier but the highest value since 2020 Q3 (Chart 3).footnote [7] Within this, the share of mortgages advanced with LTVs over 95% was 0.2%, broadly unchanged over the recent quarters.footnote [8]
- The share of mortgages advanced in Q2 with loan to value (LTV) ratios exceeding 75% increased on the quarter to 39.6%. This is also 3.2pp higher than a year earlier.footnote [9]
Chart 3: Gross advances by loan to value (LTV) ratios
Not seasonally adjusted
The proportion of lending to borrowers with a high loan to income (LTI) ratio increased by 1.9pp on the quarter to 51.4%, and is 8.3pp higher than a year earlier (Chart 4).footnote [10] Borrowers with high LTI are defined here as:
- Borrowers with single income who had a LTI ratio of 4 or above. These loans accounted for 12.4% of gross mortgage lending in 2021 Q2, a 1.0pp increase compared to the previous quarter.footnote [11]
- Borrowers with a joint income who had a LTI of 3 or above. These loans accounted for 39.0% of gross mortgage lending in 2021 Q2, a 0.9pp increase compared to the previous quarter.footnote [12]
Chart 4: Gross advances by income multiple
Not seasonally adjusted
- The share of gross mortgage advances for buy-to-let purposes (covering house purchase, remortgage and further advance) was 11.3% in 2021 Q2, a fall of 3.1pp from 2020 Q2 (Chart 5). The share of advances to owner occupiers was 88.7%.footnote [13] footnote [14]
- Of the 88.7% of advances for owner occupiers, the share for remortgages was 16.6%, a decrease of 21.3pp since 2020 Q2 and the lowest level since these statistics began in 2007. The share for house purchase was 66.4%, up 24.9pp from 2020 Q2. Further advances and other mortgages (including lifetime mortgages) accounted for 5.7% of gross advances in total.footnote [15] footnote [16] footnote [17]
- Of the 66.4% of advances for house purchases by owner occupiers, lending to first-time buyers was 6.5pp higher than in 2020 Q2, at 24.7% of gross advances, and is 2.8pp higher than 2021 Q1. The share advanced to home movers increased by 18.3pp on a year earlier, to 41.7%, but is 0.5pp lower than 2021 Q1.footnote [18] footnote [19]
Chart 5: Gross advances by purpose of loan
Not seasonally adjusted
Chart 6: Arrears balances
Not seasonally adjusted
- 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) decreased by 6.3% on the quarter, to £14.1 billion. This is the lowest since 2020 Q2 (Chart 6).footnote [20]
- The proportion of total loan balances with arrears decreased on the quarter from 0.96% to 0.89%.footnote [21]
Table 1.11 sub table A row 9
Table 1.21 sub table C row 1
Table 1.21 sub table C row 3
Table 1.22 sub table C row 3 (less than 2% above)
Table 1.22 sub table C row 4 (2.00% to 2.99% above)
Table 1.22 sub table C row 5 + row 6 (3% or more above)
Table 1.31 sub table C row 19 + row 20
Table 1.31 sub table C row 17
Table 1.31 sub table C row 20
Table 1.31 sub table C row 5 + row 13
Table 1.31 sub table C row 5
Table 1.31 sub table C row 13
Table 1.33 sub table C row 4 (buy-to-let)
Table 1.33 sub table C row 4 (owner-occupation)
Table 1.33 sub table C row 6 (remortgage)
Table 1.33 sub table C row 2 + row 3 (house purchase owner occupation)
Table 1.33 sub table C row 5 + row 9 (further advance and other)
Table 1.33 sub table C row 2 (first-time buyers)
Table 1.33 sub table C row 3 (home movers)
Table 1.7 sub table C row 10
Table 1.7 sub table C row 11