The latest figures from the FSA revealed the number of new arrears cases has been on a downward trend for the past six quarters, with a further reduction in the number in Q2 to 37,200, which is a fall of 8%.
A Council of Mortgage Lender (CML) spokesman said the falls reflect concerted effort from lenders, borrowers and government and this needed to continue.
“We want to see the same continuing level of government support along the lines of Income Support for Mortgage Interest (ISMI) and debt advice for homeowners we’ve seen over the last 18 months. We recognise the pressure on government finance but this level of support must be maintained.”
The total value of outstanding mortgage loans in the UK is now £1.2trn, little changed from last quarter. New advances in Q2 totalled £36bn, which is 14% higher than in Q1, and 8% higher than the amount advanced in Q2 2009.
“You have to take into account the fact that Q2 2009 was the low point in terms of mortgage lending volumes,” said the CML spokesman.
“The CML revised down its lending forecast for 2010 from £150 to £140bn because we’re still in a very constrained funding environment. The lending outlook is broadly flat and we’ve said repeatedly we don’t expect to see any improvement this year.”
The FSA figures also revealed lending for house purchase has recovered from the dip last quarter, to account for 61% of new advances and 63% of new commitments in Q2.
According to the figures, 90% LTV lending accounted for just over 2% of new advances where both high LTV and income multiple lending also rose slightly to just over 1%.
The level of adverse credit loans has been unchanged for the past year and totals 0.33% of the market, according to figures.
