This comes despite the spike in first-time buyer lending before the end of the Stamp Duty holiday in March, suggesting mortgage lending volumes remain in the doldrums.
Statistics from the Financial Services Authority (FSA) showed the average interest rate for new lending also rose from 3.50% in Q1 to 3.78% in Q2, reflecting increases in the rates for both variable and fixed rate lending.
The report showed the total value of outstanding loans at the end of Q2 was £1,223bn, an increase of 0.1% on last quarter. New lending totalled £40bn in the quarter, a 7% rise from the previous and on a par with lending levels last year.
Lending for house purchase accounted for 62% of new advances, up on both last quarter and on Q2 2011, and for 65% of commitments, the highest proportion yet recorded. As a result, remortgage advances fell back to 31%.
The high LTV market continues to be a tiny proportion of the whole, according to the FSA figures. The proportion of new lending done at an LTV of more than 90% was above 2% for the second successive quarter and new lending with a combination of high LTV and high income multiple was unchanged from the previous quarter, slightly in excess of 1% of new lending.
The proportion of lending to credit impaired borrowers remains at 0.3%, which has been static since the start of the year.
On arrears, in Q2 there were 34,400 new arrears cases, a fall of 3% on last quarter and 4% lower than Q2 last year. The total number of accounts in arrears at the end of the quarter also fell in Q2, by 2% to 296,500, 11% less than in Q2 2011 and the lowest total number since the end of 2007.
The proportion of the residential loan book that is in arrears, and so, not fully performing, continued to fall down to 2.44% in Q2 from 2.52% in Q1. The number of new possessions in the quarter fell by 9% to 8,720.
