Mortgage lending has increased but repossessions are also back on the up, according to new data released today by the FSA.
New loans being issued totalled £40 billion in the three months up to September 2009, an increase of 20 per cent on the previous quarter, the FSA’s statistic reveal.
However, this was still lower than the £61 billion of new advances issued in quarter three of 2008.
The number of borrowers in arrears has fallen in the three months up to September 2009 by two per cent compared to the second quarter. However, there were still 16 per cent more accounts in arrears than at the same time last year.
And the FSA revealed a total of 14,000 repossessions in the third quarter. This was a 2.8 per cent increase on the previous quarter, but five per cent below the peak experienced at the beginning of the year.
Lenders were clearly exercising caution as the number of loans to borrowers with bad credit histories remained at a low 0.4 per cent. Meanwhile, the number of 90 per cent loan-to-value (LTV) mortgages being issued was also falling.
The Council of Mortgage Lenders (CML) said the FSA’s data reflected its own findings.
Michael Coogan, director general of the CML, said: “Arrears and possessions are lower than expected earlier in the year, and the majority of the population have been choosing to stay on their SVRs or move to trackers, rather than take out fixed-rate mortgages.”
Commenting on the repossession figures, Shelter said they showed schemes to help struggling homeowners were clearly making a difference.
However, its director of policy and campaigns, added: “Our new report out today shows that in eight out of ten cases where people got free legal advice through court desk schemes they avoided repossession.
“This is why the government must keep funding free independent advice in court.”
She added: “Free advice at point of possession should be a right that continues even after the recession ends.”
Tags: borrowers, homeowners, lenders, loans, mortgage, mortgage lenders, mortgage lending
