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Mortgage lending down 12.6% over last year

Christina Hoghton
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Christina Hoghton

The heat is coming out of the housing and mortgage markets as households manage cost of living crisis

Mortgage lending in the second quarter of 2022 totalled £77.9bn, said the Bank of England, 12.6% lower than the same quarter a year ago.

New mortgage committments, which are a guide to future lending, were also down compared to the same period last year, by 2.6%, at £83.9bn.

Arrears have fallen over the last year with just 0.80% of outstanding mortgages in arrears, the lowest level since recording began in 2007.

Myron Jobson, senior personal finance analyst at interactive investor, said of the figures: “The Bank of England’s latest mortgage statistics show that the property market remained buoyant in the second quarter of this year.”

But he added that ‘things have changed in the housing market since Quarter 2’.

“It is still running red hot, but it is exhibiting the hallmarks of a slowdown. The various housing market indices suggests that new buyer enquiries have waned in recent months and the number of mortgage approvals for house purchases has fallen.

“The cost-of-living crisis in tandem with soaring property prices, which have gone up faster than wages, and cheap mortgages rapidly going the way of the dodo have intensified the affordability squeeze.”

Breakdown of lending

Lending on buy-to-let accounted for 13.6% of all mortgage lending in the second quarter of this year with 86.4% to owner-occupiers, said the Bank of England.

Of those borrowing on a residential home, the share for remortgages was 27%, 52.4% for house purchases and 6.9% for further advances and other mortgages (including lifetime mortgages). First-time buyers mortgages accounted for 22.5% of all lending.