Q3 new advances up 19% on previous quarter

The total value of outstanding loans at the end of the third quarter of 2011 was £1,218 billion, an increase of 0.2% on last quarter, the FSA has reported.

According to the regulator’s latest mortgage lending data, new advances in the quarter amounted to £44 billion, 19% higher than in the second quarter and some 7% higher than the amount advanced in the third quarter of 2010.

The overall average rate on new advances fell back during the quarter from 3.81% in the second quarter to 3.59%, a series low. There were reductions in the rates for both fixed and variable rate lending.

New commitments of £42 billion were made in the quarter, 6% up on the second quarter and 10% higher than a year ago. It is the first time in the series there has been an increase in the third quarter of the year, the FSA said.

Lending for house purchase accounted for 60% of both new advances and new commitments, very similar proportions to last quarter. The proportion of remortgage business was also much as in the second quarter.

The proportion of new lending done at an LTV of more than 90% remained below 2%, as it has been all this year. New lending with a combination of high LTV and high income multiple has also been unchanged throughout this year, accounting for less than 1% of new lending.

The proportion of loans to borrowers with an impaired credit history was 0.4% for the second quarter in succession. It has been below 1% for the past three years.

There were 34,900 new arrears cases in the third quarter this was down 2% on last quarter and 9% below the third quarter of 2010. Consequently, the total number of accounts in arrears at the end of the quarter also fell and at 324,200 was 3% down on the second quarter and 6% below the third quarter last year.

The proportion of the residential loan book that is in arrears, and hence not fully performing, continued to fall, as it has for the last three years, to 2.72%

The number of new possessions in the quarter rose by 2% to 9,670 and arrears totalling £38 million on 10,811 accounts were capitalised in the third quarter.