Proportion of low-deposit mortgages handed out at highest level since 2008

The proportion of low-deposit mortgages being handed out is at its highest since 2008, Bank of England figures show.

More than one in 20 (5.9%) mortgages advanced in the third quarter of this year had a loan-to-value (LTV) ratio exceeding 90%, according to the Mortgage Lenders and Administrators Statistics.

Lending in this LTV bracket is at its highest since the last three months of 2008, the report said.

It also said that the proportion of mortgages being handed out at 75% LTV or above had also increased, when compared with a year ago.

The figures could fuel concerns that some households may be at risk of over-stretching themselves financially.

Mortgage rates are currently at low levels amid strong competition between lenders, making payments relatively affordable.

But the figures also show that the share of mortgages being handed out in the very smallest deposit bracket, at over 95% LTV, has remained broadly unchanged since 2017, at 0.3%.

The outstanding value of all home loans in the third quarter of this year was £1,486 billion – 3.9% higher than a year earlier.

The quarterly figures are provided by around 340 regulated mortgage lenders and administrators.

The report said the gross value of mortgages being advanced in the third quarter was broadly unchanged compared with a year ago.

Meanwhile, the total value of new mortgage commitments – lending agreed to be advanced in the coming months – was 1.1% higher than a year earlier, at £73.8 billion.