Data published today (December 8) by the Financial Conduct Authority and Prudential Regulation Authority showed the value of lending agreed to be advanced stands at £78.9bn, 6.8 per cent higher than a year earlier.
However, high LTV mortgages advances were down year-on-year, with LTV ratios exceeding 90 per cent making up a mere 3.5 per cent of mortgages in Q3 2020, 2.4 percentage points lower than a year earlier.
Mark Harris, chief executive of SPF Private Clients, said: "The Bank of England figures show a strong lending market, as we have seen on the ground, with new commitments for the coming months some 6.8 per cent higher than a year earlier.
“There is plenty of business in the pipeline which is working its way through as buyers try to take advantage of the stamp duty holiday.”
Mr Harris added: “The number of borrowers taking out high loan-to-value mortgages fell. This is no real surprise with many lenders pulling back from this market, and it is only just starting to recover, which is good news for first-time buyers in particular.”
The number of 90 per cent LTV mortgages available during the pandemic has been low, and at the start of December a mere 88 products were available in this segment. However, this was the highest since the beginning of June, as lenders have started to re-enter the market.
Accord Mortgages, for example, relaunched 90 per cent LTV products on a “more consistent” basis last month (November 18) after a series of limited releases. Its parent company, Yorkshire Building Society, launched a range of 90 per cent LTV mortgages in the following week.
Meanwhile, gross advances at rates less than 2 per cent above the Bank of England base rate have fallen year-on-year, at 74.2 per cent in Q3 2020, 10 percentage points lower than a year ago,.
The Bank of England base rate has been at a record low of 0.1 per cent since March.
It comes as separate data from Moneyfacts showed the average two-year fixed rate for all LTVs has been increasing over the past five months to its current rate of 2.49 per cent.
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