The value of new mortgage commitments made during Q3 2022 was £87.8bn, shows new Bank of England (BoE) data – a 4.5% jump on the previous quarter and the highest value seen since Q3 2007.

At the same time, the outstanding value on all residential mortgages grew from £1.65tn to £1.67tn.

The BoE’s latest report, its ‘Mortgage Lenders and Administrators Statistics’, also shows a more detailed state of mortgage loans.

Of particular interest is the fact that the share of gross mortgage advances with rates less than 2% above the bank rate came to 93% in the third quarter of 2022, which is a 1.6 percentage point climb on the last quarter and 35.7 percentage points more than a year ago. This also breaks another decade-plus record – it is the highest proportion of this nature recorded since Q2 2008.

Another new record set since the BoE started noting this data in 2007 is the fact that the proportion of lending to people with a high loan-to-income ratio rose by 1 percentage point, making up 51.5% in the quarter.

And the share of advances with an LTV ratio of more than 90% rose 0.6 percentage points on the quarter, to 5% – the largest proportion since Q1 2020.

And the proportion of mortgage loans in arrears fell from 0.80% to 0.78%, which is the lowest the BoE has ever recorded.

This may have been a factor in the value of outstanding balances with arrears falling to its lowest number since 2007, £13.1bn.

Coreco managing director Andrew Montlake says: “The third and fourth quarters may as well be in different dimensions, as the mayhem caused by the mini-Budget saw lenders up their rates sharply, which torpedoed demand.

“The mortgage market in the third quarter was fluid but now, like the weather, it’s frozen. Higher interest rates and sky-high inflation, coupled with an economy edging into recession, will see the fourth quarter figures differ significantly.

“Many prospective buyers are also waiting to see if house prices come down significantly in the months ahead. Though we’re already seeing a price correction, a collapse is off the cards due to the continued lack of supply and a jobs market that is still strong, for now at least.

“We’re already seeing a rise in enquiries for secured loans and remortgages to consolidate debt as people seek to batten down the hatches as the full force of the economic storm hits in 2023. Where there is still demand is among first-time buyers, many of whom are desperate to exit the rental market as rents hit Olympian heights. If they fix for five years, they’re betting that they’ll ride out any potential negative equity dip.”

And Peak Money managing director Rhys Schofield comments: “ The third quarter largely came before the calamity of the mini-Budget. Bizarrely, December seems to have got busier. This really doesn’t feel like a crisis. The dust around rates seems to have settled. People still need mortgages whether they stay put or move home and based on estate agent listing activity, the market seems okay.

“The boom times of the past two years are over and in regards to activity we’ll probably be looking at the more steady pre-Covid pace of 2019, which is hardly an implosion of the whole housing market.”