Year-on-year jump in value of mortgage loans

This was 2.7% higher than during the same period last year but was a decrease on the final quarter of 2022 – with this being the first time the mortgage market has seen a quarterly drop in value since the second quarter of 2017.

Additionally, the £58.8bn value of gross mortgage was £22.9bn lower than the previous quarter, 23.6% lower than in the first quarter of 2022 – and is the lowest value seen since the second quarter of 2022.  

As well as this, there was a drop in the value of new mortgage commitments, with this decreasing by 16.1% when compared to the final three months of last year and is 40.7% lower than during the same period last year at £48.9bn. This was also the lowest observed since the second quarter of 2020.  

In contrast, the share of gross mortgage advances with interest rates less than two percent above the bank rate was at 93.9% – 7.7% higher than a year ago and the highest seen since the second quarter of 2008.  

Adam Oldfield, chief revenue officer at Phoebus Software, said: “The figures from the Bank of England today [13 June] confirm the downward trend in mortgage lending.  Understandable, when you consider the turmoil in the final quarter of 2022.   

“The second quarter of 2023 is likely to show the trend turning upward but, unfortunately, that may well be short lived as the Bank continues to struggle to bring inflation under control.  We only have just over a week to wait to find out what the MPC will decide regarding interest rates, but in truth we are all just waiting to see how big the increase is, rather than whether there will be one.   

“The coming months are going to be testing for the housing market, which bears the brunt of these rate rises.”