Remortgaging at two-year low

The total value of outstanding loans is now £1,203 billion, an increase of 1% compared to a year earlier, according to the FSA’s Mortgage Lending Data for the United Kingdom covering Q2 2008 to Q3 2009.

New advances totalled £40 billion, an increase of 20% on Q2, but remain lower than the £61 billion advanced in Q3 2008.

Lending for house purchase has continued to represent an increasing share of new lending, accounting for 57% of new advances and 62% of new commitments in this latest quarter.

Remortgages accounted for 34%, the lowest proportion since the series began in 2007.

The proportion of new lending done at an LTV of more than 90% continued to fall and accounted for less than 2% of new advances in the quarter.

The use of combinations of high LTVs and high income multiples also continued to decrease, down to 1% of new lending in Q3.

The proportion of loans to borrowers with an impaired credit history remained unchanged from last quarter, at a series low of 0.4%.

The number of new arrears cases continued to fall, down by 10% in the quarter to 46,000.

At the end of Q3 the number of accounts in arrears had fallen to 395,000, a decrease of 2% in the quarter, but 16% higher than in Q3 2008.

The number of new possessions totalled 14,000, a 2.8% increase on Q2, but some 5% below the peak at the start of the year.

Shelter director of policy and campaigns Kay Boycott said: “These figures reflect the fact that schemes to help struggling homeowners are making a difference on the ground and