LONDON (CU)_As the Bank of England issued its Mortgage Lenders and Administrators Statistics for the first quarter of 2021 on Tuesday (8 June), it has become apparent that the of gross mortgage advances in the United Kingdom during this period rose by 26.5 per from the same time last year, to £83.3 billion (US$118.1 billion), which is the highest level since 2007.
With the economy beginning to reopen, as the final stage of lifting lockdown due to take place later this month, mortgage deals have started to get cheaper as competition returns to the market. However, deals with interest rates that are less than two per cent above the Bank Base Rate fell by 13 per cent, suggesting that despite increasing competition, rates continue to remain higher than a year ago.
Meanwhile, mortgage arrears is also on the rise, with the value of outstanding balances with some arrears during the first quarter increasing by 5.1 per cent. This figure, which stood at £15 billion, which accounted for 0.96 per cent of outstanding mortgage balances.
“There has been frenzied activity in the market with movers searching for larger homes and more outdoor space, while the extension of the stamp duty discount to the end of June added more fuel to the fire in the first quarter of this year,” Gatehouse Bank’s chief commercial officer Paul Stockwell said. “The biggest stamp duty savings run out in just a few weeks’ time, yet measures from other housing indices suggest the frantic competition for property continues unabated.”
On the other hand, residential remortgages reached a record low of 18 per cent, which amounted to a 14 per cent decline from the same time last year. The central Bank also revealed that loans above 90 per cent loan to value also fell by 4.1 per cent, which meant that of all mortgages advanced in the first quarter, those above 90 per cent accounted for only 1.1 per cent, the lowest proportion since 2007.
