New mortgage loans in the UK fell in the final quarter of 2012, down 0.5% compared with the previous three months and down 2% on the same time last year. The figures from the Financial Services Authority (FSA) confirm other figures from organisations such as the Council of Mortgage Lenders.
The FSA data shows that advances in the final quarter amounted to £39 billion and £152 billion of new advances were made in total in 2012. The overall average interest rate on new advances decreased from 3.89% in the third quarter to 3.81% in the fourth quarter and this was largely the result of a fall in the rate for fixed rate lending.
New commitments totalling £37 billion were made in the quarter, 3% higher than in the third quarter but 0.4% lower than in the final quarter of 2011. Lending for house purchases accounted for 66% of new advances for the second successive quarter. The proportion of advances for remortgages rose in the quarter to 28%, but was lower than the 32% recorded in the same quarter of 2011. Commitments for house purchases fell back from 65% of the total in the third quarter to 64%.
The proportion of new lending done at an LTV of more than 90% remained just above 2%, as it had been throughout the rest of the year. New lending with a combination of high LTV and high income multiple was the lowest in any quarter of 2012 at 1.2%. The total value of outstanding loans at the end of the fourth quarter was £1,229 billion, an increase of 0.1% on the previous quarter.
Quote from PropertyCommunity.com : “Lending for homes in the UK has fallen 7% year on year with last month recording the third worst September since 1993, according to research published today.”
The proportion of loans to borrowers with an impaired credit history continued to be below 0.3%, as it was throughout 2012. There were 35,000 new arrears cases, a fall of 3% from last quarter but some 1% higher than in the fourth quarter of 2011. The total number of accounts in arrears at the end of the quarter fell by less than 1% from 303,200 in the third quarter to 301,800. This was a reduction of 4% over the year from the 313,200 accounts in arrears at the end of 2011.
The number of new repossessions in the quarter fell by 8% to 7,836 and overall, there were 34,583 cases taken to repossession in 2012. The mortgage data is compiled from Mortgage Lending Administration Returns (MLAR) provided by regulated firms. It covers information on residential mortgage lending and some non-regulated business, such as buy to let and second charge mortgages.