Lending rises for remortgages but falls for UK house buyers at end of 2018

House Prices Are Stagnant In London
The proportion of loans going to first time buyers remained high by historical standards, at 21.2 per cent (Source: Getty)

Mortgage lending was up for remortgaging and down for house purchasing in Britain in the fourth quarter of 2018 compared to a year earlier, new statistics by the Bank of England and Financial Conduct Authority (FCA) have shown.


The proportion of high loan-to-income (LTI) loans, those greater than four times the value of annual income for a single buyer or three times the annual income for joint buyers, remained at 46.9 per cent, its highest rate since the statistics began in 2007.

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The outstanding value of all residential mortgage loans was £1.45 trillion in the fourth quarter of 2018, 3.3 per cent higher than a year earlier.

Lending to existing borrowers in the form of remortgaging was 1.4 percentage points higher than a year earlier, at 31.1 per cent of the total figures, the statistics revealed.


The proportion of lending for house purchases, including all buy-to-let lending, was one percentage point lower than in 2017’s fourth quarter at 63.5 per cent.

Loans made to people with impaired credit histories stood at 0.65 per cent of the total, compared to 0.33 per cent a year earlier. This number has been creeping up in recent years, although it stands well below 2007’s first quarter rate of 3.6 per cent.

The data also revealed that the percentage of total loans going to first time buyers remained high by historical standards, at 21.2 per cent. Buy-to-let buyers took 12.5 per cent of total loans in the fourth quarter.

Keith Haggart, managing director at mortgage provider Responsible Lending, said: “Buyers are stuffing their pockets while they can, with the proportion of high loan-to-income loans higher than at any time since 2007.”

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“Low interest rates are responsible for this, and cheap borrowing continues to trump economic outlook when it comes to borrowers’ appetite to forge ahead,” he said.

“Remortgages are taking an increasing slice of the pie and that’s to be expected because we already know transaction volumes remain on the floor by historic standards.”