Mortgage lending hits five year high
Latest Bank of England figures show that mortgage lending recorded its strongest quarterly jump in five years in the third quarter of 2025, with gross advances rising 36.9% to £80.4 billion. The increase marks the sharpest quarterly gain since 2020 amid a renewed surge in the UK property market.
The data showed that the outstanding value of all residential mortgage loans increased by 0.9% from the previous quarter to £1,733.7 billion, and was 2.9% higher than a year earlier.
The value of new mortgage commitments increased by 1.6% from the previous quarter to £79.4 billion, the highest since 2022 Q3, and was 20.3% higher than a year earlier.
The share of gross mortgage advances with loan-to-value (LTV) ratios exceeding 90% increased by 0.3 percentage points (pp) from the previous quarter to 7.4%, the highest share since 2008 Q2, and was 0.8pp higher than a year earlier.
The proportion of lending to borrowers with a high loan-to-income (LTI) ratio increased by 3.3pp from the previous quarter to 44.7%, the largest increase since 2020 Q3, but remained 0.6pp lower than a year earlier.
The value of outstanding mortgage balances with arrears decreased by 2.9% from the previous quarter to £20.6 billion, and was 5.8% lower than a year earlier.
The proportion of the total mortgage loan balances with arrears, relative to all outstanding mortgage balances, has stayed the same as the previous quarter at 1.2%, and was 0.1pp lower than a year earlier.
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North of England FinTech Report 2025
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Second charge mortgage new business volumes grew by 15% in July 2025
Commenting on the latest new business figures for the second charge mortgage market, Fiona Hoyle, Director of Consumer & Mortgage Finance and Inclusion at the Finance & Leasing Association (FLA), said:
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