Credit, Collections & Insolvency News
Latest data from the Bank of England has shown that the number of new mortgages competed by lenders jumped 50.4% to £77.6 billion in the first three months of the year compared to 12 months ago, hitting the highest quarterly level for more than two years.
The data shows that the outstanding value of all residential mortgage loans increased by 1.2% from the previous quarter to £1,698.5 billion and was 2.6% higher than a year earlier.
The value of outstanding mortgage balances with arrears decreased by 2.9% from the previous quarter to £21.5 billion, but remained 0.9% higher than a year earlier.
New arrears cases (as a proportion of total outstanding balances with arrears) decreased by 1.7% from the previous quarter to 10.2%, and was 1.2% lower than a year earlier.
The proportion of the total mortgage loan balances with arrears, relative to all outstanding mortgage balances, has stayed broadly consistent from the previous quarter at 1.3%. This was the same as a year earlier.
The number of new possessions in 2025 Q1 increased by 12.3% from the previous quarter to 2,307, the highest since 2019 Q3, and was 10.0% higher than a year earlier. Whilst the total stock of possessions increased by 7.2% from the previous quarter to 7,822, the highest since 2014 Q3, and was 29.7% higher than a year earlier.
Richard Pinch, Senior Director, Risk, at leading independent financial services consultancy Broadstone, said “The first quarter of 2025 got off to a strong start, as mortgage lending increased by 1.2% and both new arrears cases, and the value of mortgage balances with arrears saw an encouraging dip from the previous quarter.
“A rush to fast-track property purchases ahead of the Chancellor’s new tax regime in April and two interest rate cuts from the Bank of England are most likely to have given mortgage lending a lift in the first three months of the year.
“However, financial pressures persist. The Chancellor’s new tax regime is now in force and today’s unemployment data shows increasing strains in the labour market. With many families still feeling the squeeze from the cost-of-living crisis, and economic uncertainty lingering, the full impact on mortgage performance may yet unfold in the quarters ahead.
“It’s therefore critical that lenders continue to take a balanced and supportive approach – helping borrowers manage through short-term pressures while keeping a close eye on longer-term risks.”
Simon Webb, Managing Director of capital markets and finance at LiveMore, said “It’s encouraging to see continued growth in later life lending, reflecting the evolving financial needs of people in their 50s and beyond. Whether it’s helping children onto the property ladder, funding lifestyle changes, or managing existing debt, older borrowers are increasingly seeking flexible, tailored solutions.”
