The value of new mortgages advanced during the first quarter fell by 10 per cent from £73.4bn to £65.8bn from Q4 last year, the latest Bank of England figures show.

However, total advances were 3.8 per cent higher than Q1 2019.

New commitments for lending over the coming months was down by 4.3 per cent from £70.6bn to £67.6bn between Q4 and Q1, but up 6.1 per cent year on year.

The share of mortgages with loan-to-value ratios exceeding 90 per cent increased by 0.7 percentage from the same time last year to 5.2 per cent.

The value of outstanding balances with some arrears increased by 1.8 per cent over the quarter to £13.7bn.

Buy-to-let lending as a proportion of the overall market was unchanged from a year earlier at 14 per cent.

SPF Private Clients chief executive Mark Harris says: ‘The Bank of England data relates to the first quarter of the year when the impact of covid-19 had not yet been fully felt. 

“While this makes it feel very historic, it does show what might have been had the pandemic not hit, with an increase in gross mortgage advances compared with the previous year, as well as the value of new mortgage commitments. 

“With lenders including Accord, Clydesdale and Virgin Money pulling out of the 90 per cent LTV market this week owing to high demand, after only recently returning when physical valuations were once again allowed, there is clearly a need for the big lenders to commit to this market. 

“The number of people taking out high LTV mortgages in the second quarter is likely to fall considerably, not due to lack of demand but lack of products available.”

But he adds: “Encouragingly, buy-to-let lending was stable, even though the sector has come in for a lot of change on the tax and regulatory front. Investors are adapting to the new environment and tailoring their portfolios accordingly. 

“The impact of tenants unable to pay their rent is providing a further challenge for landlords, although of course this won’t be apparent until the second quarter figures.”