New mortgage commitments for the third quarter of 2010 totalled £38 billion, 6% down on the previous quarter but again in line with Q3 last year, the FSA has reported.
The total value of outstanding loans for the period is £1,220 billion, an increase of less than 1% on last quarter. New advances in the quarter totalled £41 billion, 12% higher than in Q2 but much the same as the amount advanced in Q3 2009.
In Q3, lending for house purchase accounted for 64% of new advances, the highest percentage in the series, and 61% of new commitments.
The proportion of new lending done at an LTV of more than 90% accounted for just over 2% of new advances for the second successive quarter. New lending with a combination of high LTVs and high income multiples continues to account for just over 1% of new lending as it did in Q2.
The proportion of loans to borrowers with an impaired credit history increased slightly this quarter to 0.44%.
The number of new arrears cases has fallen in each of the last seven quarters and was down to 36,600 in Q3 (-2%). The total number of accounts in arrears has also continued to fall, each quarter over the past year, decreasing by 2% in Q3 to 346,000. Consequently, the proportion of the residential loan book that is in arrears, and hence not fully performing, also fell and now stands at 2.97%.
The number of new possessions in the quarter continued to decline, decreasing by 8% to 9,145, the lowest figure since the end of 2007. Arrears totalling £44 million on 16,184 accounts were capitalised in Q3.
The FSA definition of a reportable arrears case covers loans where the amount of actual arrears is 1.5% or more of the borrower’s current loan balance. For example if the loan balance is £100,000 and arrears on the loan amount to £1,500 or more, then it is a reportable arrears case for MLAR purposes.
