The level of high loan-to-value (LTV) mortgage lending has hit an 11-year peak.
Data from the Bank of England shows that the share of mortgages advanced in the second quarter of 2019 with LTVs exceeding 75% was 39.7%, the highest since 2008.
The share of mortgages with LTVs exceeding 90% was 5.5%. This is the highest since the fourth quarter of 2008.
Meanwhile, the proportion of total mortgage balances in arrears has fallen to its lowest level in 12 years, falling from 0.99% to 0.97% which is the lowest since the series began in 2007.
Commenting on the data, Mark Pilling, managing director at Spicerhaart Corporate Sales, said: “It is obviously great news that arrears are low and still falling, but that does not necessarily mean that people are not experiencing financial difficulties.
“Instead, what I think we can take from these figures is that lenders are continuing to do all they can to help borrowers who are struggling, to ensure that repossession is always the last option.
“Another more worrying trend that we can see from these stats is that the number of mortgages with higher LTVs is continuing to increase.
“This suggests that some borrowers may be stretching themselves too thin, and if rates do rise, they may start to struggle with their repayments.”
Comments (1)
Apologies, but are you a website designed to encourage sales in estate agency or a website designed to put the fear of god in to estate agents? Surely it is good news that a) Lenders are lending to this type of client therefore creating more buyers for agents stock, and b) it’s great news that less and less clients are in arrears on their mortgage.
Alternative headline options therefore as follows:
“Increased lending to low deposit clients a shot in the arm to the property market”
“Mortgage arrears at their lowest level since property crash, new lending reaches record high for first time buyers with low deposits”
“Good news for agents as mortgage market shows signs of improvement for mortgage buyers”
Comments from mortgage lenders or brokers would have been far more conservative and encouraging than that of Paul Smith’s repo team wouldn’t it? Although I am sure spicerhaart’s mortgage team were far too busy to give comment, surely someone within Paul’s business could’ve given comment in a more positive manner?
I guess all of that wouldn’t make for click bait and conversation around why anyone’s estate agency business isn’t selling enough houses though…….