Latest FSA figures show that new lending for home buyers is still very low
|Tuesday, 11 December 2012|
New lending for home buyers in the UK is still historically low although the total value of outstanding loans has increased slights, the latest data for the Financial Services Authority (FSA) shows.
Its latest Mortgage Lending Data for the United Kingdom covering the third quarter of 2012 shows that the total value of outstanding loans was £1,227 billion, an increase of 0.3% on the previous quarter.
New advances in the quarter amounted to £40 billion, a 7% increase on the second quarter but 9% below the third quarter of 2011.
The overall average interest rate on new advances increased from 3.78% last quarter to 3.89% in the third quarter and there was an increase in the rates for both variable rate lending and for fixed rate lending.
New commitments totalled £36 billion in the quarter, down 10% from last quarter and 14% lower than in the same quarter of last year.
Lending for house purchase accounted for the highest proportion of new advances seen in this series, at 66%. This was up 62% on the last quarter and 60% above a year ago. As a consequence, the proportion of advances for remortgages was the lowest ever at 27%. The figure for commitments for house purchase was also a series high at 66%.
The proportion of new lending done at an LTV of more than 90% remained above 2% for the third successive quarter.
New lending with a combination of high LTV and high income multiple showed a further small upward move, but remains low in historic terms at 1.4% of new lending.
The proportion of loans to borrowers with an impaired credit history has remained at the same low level for three quarters in succession at 0.3%.
There were 35,900 new arrears cases in the third quarter, an increase of 4% on the previous quarter and of 3% on the third quarter of 2011.
Although the total number of accounts in arrears at the end of the quarter was up 2% to 303,200, this was 7% less than the 324,300 accounts in the same quarter of 2011.
The proportion of the residential loan book that is in arrears, and hence not fully performing, was little changed from last quarter, at 2.46% in the third quarter compared to 2.45% in the previous quarter.
Arrears totalling £27 million on 7,644 accounts were capitalised in the third quarter and the number of new possessions in the quarter fell by 2% to 8,521.
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