The Bank of England has released its Mortgage Lenders and Administrators Statistics for the fourth quarter of 2014.
Gross advances of £51.3 billion were recorded in Q4 2014. This was 8.1% lower than Q3 2014 and 0.2% lower compared with Q4 2013.
New commitments also decreased – from £53.6 billion in Q3 2014 to £46.3 billion in Q4 2014, a decrease of 8% compared with Q4 2013.
The proportion of gross advances at fixed rates decreased for the first time in nine quarters falling to 82.2% in Q4 2014 from 82.6% in Q3 2014. The Q3 outturn was highest since the series began in Q1 2007.
The value of residential loans advanced to first time buyers decreased over the quarter to £11.2 billion from £12.1 billion in the previous quarter. The Q3 2014 outturn was the highest since Q3 2007.
Buy to let lending increased from £6.6 billion advanced in Q4 2013 to £7.6 billion in Q4 2014.
The proportion of gross advances at an LTV over 90% decreased by 0.5 percentage points over the quarter to 3.8% in Q4 2014. The proportion of gross advances to borrowers with a single income multiple of more than 4.00x decreased by 1.1 percentage points to 9.7% in Q4 2014.
The proportion of gross advances that is a combination of an LTV over 90% and loan-to-income multiple of over 3.5x for single income borrowers (or 2.75x for joint income borrowers) decreased over the quarter by 0.6 percentage points to 2.5%.
Adrian Gill, director of Your Move and Reeds Rains estate agents, said: “The lending landscape has been extensively re-shaped in the past year, and fresh regulations and affordability checks have cultivated a much healthier mortgage market. Mortgage approvals may take longer to come to fruition, but buyers are benefiting from a more thorough and considered borrowing process. In the longer term, providing customers with the most suitable mortgage product for their needs is of paramount importance.
“Front-end demand is beginning to blossom in 2015, as consumer confidence grows. Slashed stamp duty fees and more gradual house price growth are bringing homeownership closer within reach of aspiring buyers, while at the same time rock bottom inflation and competitive mortgage deals are giving borrowers a boost. Buyers are finding brilliant deals on homes, and this front-end sales activity will soon trickle down to completions, feeding the property recovery.”