Outstanding loans increase by 0.2pc

Nia Williams

September 13, 2011

The FSA said the £2bn increase repeats the pattern of earlier years as small increases also occurred in the equivalent quarter of 2010 and 2009.

The figures also show that over the 12 months to the end of Q2 there was an increase in the loan book of £5.4bn.

Regulated loans continued to account for an increased proportion of overall loans each quarter since the series started.

At the end of the second quarter regulated balances had risen to £925bn accounting for some 76% of the total book. Non-regulated balances had decreased by 1% to £289bn.

New advances in the quarter totalled £37bn, 11% higher than in the first quarter and very similar to the amount advanced in the second quarter of 2010.

The proportion of new lending at fixed rates increased in Q2, for the fifth successive quarter, to 56% from a low of 37% in Q1 2010.

Remortgage business declined accounting for a smaller proportion of new lending from 38% to 34%.

Lending for house purchase increased to 59% from 54% in the first quarter.

Gross advances for house purchase also increased in value terms in the second quarter and at £21.6bn were 22% higher than last quarter.

The proportion of new lending for buy-to-let has increased in each of the last three quarters and accounted for 8.9% of overall residential lending in Q2.

In value terms there was a 19% increase in BTL loans in Q2 over the amount advanced in Q1 and at £3.2bn was the largest quarterly amount lent since Q4 2008.

In terms of the total outstanding loan book, the proportion of BTL loan balances has also been increasing over the last few quarters and now stands at 12.08%, the highest percentage since the series started.

The proportion of new lending at 90% loan to value or above, dipped to 1.7% in Q1 of this year and then rose slightly in Q2 to 1.9%.

There was little change in the number of new arrears cases in Q2, 35,700 compared to Q1, 35,600.

Firms report to the FSA each quarter on their residential mortgage lending activities using the Mortgage Lending & Administration Return.

Every quarter the FSA subsequently publishes a report of the complied statistics.

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