Data published today by the Bank of England and the Financial Conduct Authority also shows gross first-charge mortgage advances were up 26 per cent year-on-year in the second quarter of 2013, from £32.5bn to £41bn.
New first-charge commitments in the second quarter totalled £41.3bn, up 16.6 per cent on the £35.4bn of new commitments a year earlier.
Non-regulated advances – which includes buy-to-let, second charge lending and further advances on mortgages taken out prior to mortgage regulation in 2004 – totalled £5.6bn in the second quarter, up 27 per cent on Q2 2012 when £4.4bn was advanced.
Of the £5.6bn of non-regulated lending in the second quarter, buy-to-let accounted for £5bn – up 38.8 per cent on the £3.6bn advanced a year earlier.
The gross lending total in the second quarter was the highest since the Financial Services Authority began collecting data in 2007.
SPF Private Clients chief executive Mark Harris says: ”More first-time buyers are returning to the market, with a small increase in those borrowing more than 90 per cent LTV. With the Help to Buy scheme guaranteeing loans for buyers with modest deposits, we expect this trend to continue.
”While George Osborne has stated that high loan-to-value mortgages are not ‘exotic weapons of mass destruction’, borrowers must still ensure that they can afford a high LTV mortgage before taking the plunge.”
Net advances for all lending was £5.1bn in the second quarter, which is 8.6 per cent higher than the second quarter of 2012, when net lending was £4.6bn.
Lending for house purchase accounted for 65 per cent of all lending in the second quarter – up from 62.4 per cent a year earlier – of which 19.1 per cent was to first-time buyers, up from 16.5 per cent a year earlier. Remortgage lending accounted for 30.4 per cent of new advances a year ago and 28.3 per cent in Q2 2013. Further advances accounted for 3 per cent of new advances in the second quarter.
The percentage of new first-charge advances which were fixed rates totalled 77.1 per cent in the second quarter, the highest proportion since the regulator began collecting statistics in 2007. A year earlier 56.9 per cent o new advances were fixed rate mortgages.
The average interest rate on new fixed rate loans in the second quarter was 3.58 per cent, down from 4.22 per cent a year earlier. Variable rate loans fell from 3.2 per cent to 3.14 per cent over the same period.
The proportion of total lending above 90 per cent loan-to-value was 2.5 per cent, while the proportion of lending above 95 per cent LTV was 0.5 per cent. A year ago, total lending above 90 per cent LTV was 2.1 per cent.
The number of new loans in arrears in the second quarter totalled 32,520 in the second quarter, down from 34,456 a year earlier, while the total number of accounts in arrears fell from 296,484 to 292,181 over the same period.
The number of new repossessions in the second quartered totalled 7,795, down 10 per cent from 8,695 a year earlier.