14 June 2022
If you are covering the Bank of England’s mortgage lenders and administrators statistics, please see the following comment from Karen Noye, mortgage expert at Quilter:
“The Bank of England’s latest mortgage lenders and administrators statistics show the property market continued to move at a rapid pace in Q1 of this year, though this is unlikely to last. By the end of Q1 2022, the outstanding value of all residential mortgage loans was £1,630.5 billion - 4.4% higher than the previous year.
“The data show that the value of gross mortgage advances reached £76.9 billion – up £6.7 billion on the previous quarter. However, as the data from the previous quarter included the cooling off period following the final withdrawal of the stamp duty holiday, this growth is not unexpected. Mortgage lending in Q1 2022 was 7.5% lower compared to the same period a year earlier, which suggests the rush to buy is finally slowing.
“The value of new mortgage commitments also grew considerably in Q1 2022 to £82.5 billion, up 6.7% on the previous quarter and 6.6% compared to the previous year. Given this data is from Q1 alone, this is likely as a result of people pushing to buy while the Bank of England interest rates were still relatively low and cheap mortgage deals were still on the shelves.
“As circumstances have changed significantly since Q1, the Bank Rate has crept higher and cheap mortgage deals have largely become a thing of the past, we can expect to see a considerable cooling off in terms of lending in the following months. This will likely be seen across the board, but first time buyers in particular, who were already struggling to take their first step on the property ladder, will find it harder still as their spending power will reduce as their deposits are eroded by inflation.
“Throughout the rest of the year, we are likely to see mortgage lending drop as more people are priced out of the market by the rising cost of living and BoE interest rate hikes, as well as being put off by the continuing economic uncertainty.”
