New mortgages competed by lenders jumped 50.4% to £77.6bn in the first three months of the year compared to 12 months ago, Bank of England data shows, hitting the highest quarterly level for more than two years.

Home loans completed in the first quarter of the year came in at the greatest total since the final three months of 2022, and was 12.8% higher than the previous quarter.

However, the central bank figures show that possessions in the first quarter of 2025 rose 12.3% from the previous quarter to 2,307, the highest since the third quarter of 2019, and up 10% from a year ago.

The UK’s total stock of possessions lifted 7.2% from the previous quarter to 7,822, the highest since the third quarter of 2014, and was 29.7% higher than a year ago.

However, new arrears cases — as a proportion of total outstanding balances with arrears — fell by 1.7% from the previous quarter to 10.2%, and was 1.2% lower than the year before.

The share of gross advances for remortgages for owner occupiers fell 2.2% from the previous quarter to 21.3%, and was 10.5% lower than a year ago.

Black & White Bridging chief executive Martyn Smith argues the figures “paint a nuanced picture of the mortgage market’s recovery”.

Smith says: “On the one hand, the sharp rise in gross advances and outstanding mortgage balances signals growing confidence among borrowers and lenders alike.

“But dig a little deeper, and we see a market still feeling its way forward.

“The surge in lending to first-time buyers is encouraging, showing that pent-up demand is being unlocked — yet the dip in remortgaging and softening in new commitments suggests many homeowners remain cautious, likely waiting for greater rate stability.

Smith adds: “From a specialist lending perspective, the uptick in high LTV borrowing — now at its highest level since 2008 — speaks to a growing appetite for risk and the increasing importance of lenders who can handle more complex cases.

“But this must be balanced against a rise in possessions, which is a warning that affordability remains under pressure for many households.

“In short, while momentum is returning, it’s far from a straightforward bounce-back. Lenders will need to remain agile, responsive and more personalised in their approach as the market continues to rebalance.”