Latest Bank of England (BOE) figures have indicated that the value of gross mortgage advances in 2021 Q2 was £89 billion, over double the amount seen in 2020 Q2, and the highest level since 2007.

The value of new mortgage commitments (lending agreed to be advanced in the coming months) was almost 2.5 times greater than a year earlier, at £85.6 billion, but £2.1 billion lower than the recent peak seen in Q4 2020. 

Whilst The outstanding value of all residential mortgage loans was £1,584.1 billion at the end of 2021 Q2, 4.6% higher than a year earlier.

The value of outstanding balances with some arrears decreased by 6.3% over the quarter to £14.1 billion and now accounts for 0.89% of outstanding mortgage balances.

Commenting on the figures Target Group Business Development Director Mark Gilliver said “Throughout the pandemic, the mortgage market has been in a state of fluctuation, initially seeing a drop in demand during the first lockdown, but then experiencing a boom in demand thanks to the stamp duty holiday initiative.”

“However, the Q2 results could be seen as outliers, as we are unlikely to see such a rush again for a while. With inflationary pressures and the threat of increased interest rates not far off, the next quarter could well tell a very different story.”

“This could be a sign that the phase of bigger mortgages is on its way out now that the UK has reopened and spending on non-essentials items is reintroduced into the public’s budgets.

“The truth of the matter is the housing market isn’t out of the woods yet, and lenders now need to be ready for rate rises, and how this will affect repayments.”