New mortgage commitments rose 1.6% to £79.4 billion, the highest since the third quarter of 2022 and 20.3% higher than a year ago

UK mortgage lending recorded its strongest quarterly jump in five years in the third quarter of 2025, with gross advances rising 36.9% to £80.4 billion, according to new data from the Bank of England (BoE). The increase marks the sharpest quarterly gain since 2020 amid a renewed surge in the UK property market.

The total value of outstanding residential mortgages rose 0.9% in the quarter to £1,733.7 billion, 2.9% higher than a year earlier. New mortgage commitments rose 1.6% to £79.4 billion, the highest since the third quarter of 2022 and 20.3% higher than a year ago.

Higher-risk lending continued to expand. The share of high loan-to-value (LTV) lending, with LTVs above 90% rising by 0.3 percentage points to 7.4%, the highest since the second quarter of 2008 and 0.8 percentage points higher than a year earlier.

Lending to borrowers with elevated loan-to-income ratios rose by 3.3 percentage points to 44.7%, the largest quarterly increase since the third quarter of 2020, though still 0.6 percentage points below last year’s level.

Owner-occupier purchase activity strengthened. House purchase loans accounted for 58.6% of gross advances, up 2.5 percentage points on the quarter but still 5.8 percentage points lower than a year earlier. Remortgaging for owner-occupation dropped by 0.4 percentage points to 28.6%, but remained 5.8 percentage points higher year-on-year.

Richard Pike, chief sales and marketing officer at Phoebus Software, said: These figures demonstrate the mortgage market was in rude health over the summer, with overall lending up for the seventh consecutive quarter.

Gross advances saw the largest quarterly increase for five years as borrowers took advantage of falling rates following the Bank of England’s base rate cut in August, he said.

New mortgage commitments were also at their highest since Q3 2020, showing a strong pipeline for lenders for the rest of the year, he said.

He added: Just under half of this lending (44.7%) was to borrowers with high loan-to-income ratio as mortgage companies offer more low-deposit products. This is opening the possibility of home ownership to more people and stimulating market activity but comes with higher risk.