What has happened?
The FCA collects mortgage lending data via the Mortgage Lending and Administration Return (MLAR)1 which is submitted by firms carrying out mortgage lending and mortgage administration.
1 see details at https://www.fca.org.uk/firms/regulatory-reporting/mortgage-lending-administration-return-mlar
Since the beginning of 2007, around 340 regulated mortgage lenders and administrators have been required to submit an MLAR each quarter, providing data on their mortgage lending activities.
The FCA and the Prudential Regulatory Authority have responsibility for the regulation of mortgage lending compliance and administrators and jointly publish this data every quarter.
What are the key points of the March 2023 data?
- The outstanding value of all residential mortgage loans was £1,675.8 billion at the end of 2022 Q4, 3.9% higher than a year earlier.
- The value of gross mortgage advances in 2022 Q4 was £81.6 billion, which was £4.3 billion lower than the previous quarter but 16.3% higher than in 2021 Q4.
- The value of new mortgage commitments (lending agreed to be advanced in the coming months) in 2022 Q4 was 33.5% less than the previous quarter and 24.5% less than a year earlier, at £58.4 billion.
If the onset of the Covid-19 pandemic and period immediately thereafter is excluded, this was the lowest observed since 2015 Q1.
- The share of gross mortgage advances with interest rates less than 2% above the Bank Rate was 93.6% in 2022 Q4, 22.0 percentage points (pp) higher than a year ago and the highest seen since 2008 Q2.
- The share of gross mortgage advances in 2022 Q4 with loan-to-value (LTV) ratios exceeding 90% was 5.1%, 0.9 pp higher than a year earlier and the highest observed since 2020 Q1.
- The proportion of lending to borrowers with a high loan-to-income (LTI) ratio decreased by 2.2 pp on the quarter to 49.3% in 2022 Q4, the lowest seen since 2021 Q3.
- The share for house purchase for owner occupation was 55.4%, down 0.8 pp on the previous quarter, but up 2.3 pp from 2021 Q4. The share of gross advances for remortgages for owner occupation was 27.3%, a decrease of 0.8 pp since 2021 Q4, but an increase of 2.4 pp since 2022 Q3.
- The value of outstanding balances with arrears increased for the first time since 2021 Q1, by 4.6% over the quarter and 1.3% over the year, to £13.6 billion in 2022 Q4. This now accounts for 0.81% of outstanding mortgage balances but remains close to the historical low of 0.78% in 2022 Q3.
How can we help you?
Thistle Initiatives has supported lenders for over 10 years as a trusted mortgage lending compliance and regulatory advisor. In addition to assisting you as-and-when, our team of specialists can serve as your right hand in a meeting and complying with regulations. We understand the importance of staying up-to-date and compliant and are dedicated to providing the guidance and support needed to do so.
Are you looking for help with your mortgage lending compliance and arrears framework, MLAR returns or more general regulatory questions? Contact our specialist mortgage lending compliance team now to schedule a free consultation. Get in touch with us by calling 0207 436 0630 or sending an email to info@thistleinitiatives.co.uk.