Part A: UK household indebtedness

Chart A.18 Household indebtedness is elevated Sources: ONS and Bank calculations. (a)Gross debt as a percentage of a four-quarter moving sum of disposable income. Includes all liabilities of the household sector except for the unfunded pension liabilities and financial derivatives of the non-profit sector. The household disposable income series is adjusted for financial intermediation services indirectly measured (FISIM). UK household DTI ratio (a)

Chart A.19 The proportion of households with high DTI ratios has been declining in recent years Sources: NMG survey and Bank calculations. Percentage of households with mortgage LTI or total DTI ratios above 4

Chart A.20 Debt-servicing ratios have ticked up in 2016 Sources: British Household Panel Survey (BHPS), NMG Consulting survey, Understanding Society and Bank calculations. (a)Mortgage DSR calculated as total mortgage payments as a percentage of pre-tax income. (b)A new household income question was introduced in the NMG survey in Data from 2011 to 2014 surveys have been spliced on to 2015 data to produce a consistent time series. Results for 2016 are from the H1 survey, while those for previous years are from the H2 waves. (c)BHPS/Understanding Society data to the left of the dashed line are from the BHPS (1991–2008), while data to the right are from Understanding Society (2009–13). BHPS/Understanding Society estimates exclude households for whom more than 1% of income is imputed. Percentage of households with DSRs above 40% (a)(b)

Chart A.21 Lending growth to households has been increasing steadily Source: Bank of England. (a) Sterling lending by UK MFIs and other lenders to UK individuals (excluding student loans).Seasonally adjusted. Total lending to individuals since 2008 (a)

Chart A.22 There is evidence of increased ‘bunching’ of mortgage lending flows at LTI ratios just below 4.5 Sources: FCA Product Sales Database and Bank calculations. (a)FCA Product Sales Database includes regulated mortgage contracts only. Loan to income (LTI) ratio calculated as loan value divided by the total reported gross income for all named borrowers. Chart excludes lifetime mortgages, advances for business purposes and remortgages with no change in the amount borrowed. Distribution of owner-occupier mortgage flows by LTI (a)

Chart A.23 Recent uncertainty may have driven a fall in new buyer enquiries Source: Royal Institution of Chartered Surveyors (RICS). (a)The percentage balance of respondents reporting an increase in new buyer enquiries over the past month less the percentage reporting reduced enquiries. Series are seasonally adjusted New buyer enquiries (a)

Chart A.24 Home builders’ share prices have fallen sharply since the referendum Sources: Bloomberg and Bank calculations. (a) 100 = closing price on 23 June. (b) Market capitalisation weighted index of the eleven largest UK home builders in the FTSE 350 Household Goods and Home Construction Index. FTSE All-Share and home construction share indices, 17 June–1 July 2016 (a)

Box 3: Underwriting standards for buy- to-let mortgages

Chart A Gross advances for buy-to-let lending Sources: Council of Mortgage Lenders, firm lending plans and Bank calculations.