Gross mortgage advances lifted by 16.7% to £60.2bn in the second quarter of the year from three months ago, according to the Bank of England.

This figure was the first increase since the third quarter of 2022, and was 15.5% higher than a year ago, data from the central bank’s latest Mortgage Lenders and Administrators Statistics shows.

The value of new mortgage commitments — lending agreed to be advanced in the coming months — increased by 11.3% from the previous quarter to £66.9bn, and was 12.5% higher than a year earlier.

The share of gross mortgage advances for buy-to-let purposes — covering house purchases, remortgages and further advances — increased by 0.7% from the previous quarter to 9% and 0.8% higher than a year ago.

The outstanding value of all residential mortgage loans lifted by 0.4% from the previous quarter to £1.7trn, and was 0.3% higher than a year earlier.

LiveMore managing director of capital markets Simon Webb says: “The Bank of England’s latest mortgage statistics reflect a modest but important growth in both mortgage lending and commitments, with gross mortgage advances rising by 16.7% from the previous quarter.

“However, amid this growth, we also see challenges, particularly with the increased proportion of lending to high loan-to-income borrowers and the rising value of mortgage balances with arrears, which has reached its highest point since 2016.”

Target Group sales and growth lead Melanie Spencer adds: “It’s clear from today’s figures that borrowers have responded well to the positive changes in the market, as the value of both gross mortgage advances and new mortgage commitments increases.

“Growing competition among lenders off the back of movement on swap rates and the bank base rate has clearly helped put a potential move back on the radar for many people.

Spencer  points out: “While it is positive to see a drop in new arrears cases, mortgage balances with arrears continues to increase in value, while total arrears remain far higher than 12 months ago.

“Combine this with a rise in high loan-to-income lending and an increase in higher loan-to-value lending – albeit only marginally – and there’s no question that lenders will need to stay close to number of borrowers.”