However, quarter-on-quarter, net lending advances fell from the end of 2013 to the end of Q1 from £9bn to £7bn, confirming a slowdown in lending growth after the Mortgage Market Review (MMR) regulatory changes introduced in April.

Lending to homebuyers constituted 66.4% of all lending, down 1.8% on the previous quarter. The proportion of lending to first-time buyers also fell by 0.5% from the series peak in Q4 2013 to 20.1% in Q1 2014. The proportion of lending for remortgages increased to 27.4% in Q1 2014, up to £12.9bn, against £10bn in Q1 2013, an increase of 29%.

The proportion of fixed rate loans rose for the sixth consecutive quarter to 81% of all gross mortgage lending. This is an increase of 10.3% compared with Q1 2013 and the highest proportion since the series began in 2007, said the bank.

The overall average interest rate on new lending fell by 0.1% in Q1 2014 to 3.24%, which is the lowest interest rate since 2007, mainly driven by a decline in variable rate loan average of 0.6% to 2.93%.

Jonathan Harris, director of mortgage broker Anderson Harris, said:

“Borrowers are protecting themselves where they can with more than 80% of new mortgages taken on a fixed basis. Even though the average fixed rate edged 0.2% higher, while variable rates fell on average by 0.6%, the growing threat of an interest rate rise means the allure of the fixed rate is strong.”

He added: “The proportion of lending to first-time buyers declined by 0.5% on the previous quarter which is perhaps surprising given that the second phase of Help to Buy is well under way. But this reflects the general easing across the market to which first-time buyers are not immune.

“We would expect to see a further falling off in lending volumes when the second quarter’s statistics are published but this was always expected as they will cover the period when the mortgage market review was introduced.”

Higher LTV lending over 90% increased by 1.5% to 3.6% of all lending in Q1, the highest amount since Q4 2008. However, the number of borrowers borrowing more than four times their income stayed the same at 11.6%.

The number of new arrears cases in Q1 2014 was 27,761. This was 5% lower than in Q4 2013 and was the lowest since the series began in 2007.