FSA mortgage lending data revealed

The FSA data shows the total value of outstanding loans at the end of Q3 was £1,218bn, an increase of 0.2% on last quarter.

New advances in the quarter amounted to £44bn, 19% higher than in Q2 and some 7% higher than the amount advanced in Q3 2010.

The overall average rate on new advances fell back during the quarter from 3.81% in Q2 to 3.59%, a series low. There were reductions in the rates for both fixed and variable rate lending.

New commitments of £42bn were made in the quarter, 6% up on Q2 and 10% higher than a year ago. It is the first time in the series there has been an increase in the third quarter of the year, according to the FSA.

Lending for house purchase accounted for 60% of both new advances and new commitments, very similar proportions to last quarter. The proportion of remortgage business was also much as in Q2, the FSA said.

The proportion of new lending done at an LTV of more than 90% remained below 2%, as it has been all this year.

New lending with a combination of high LTV and high income multiple has also been unchanged throughout this year, accounting for less than 1% of new lending.

The proportion of loans to borrowers with an impaired credit history was 0.4% for the second quarter in succession. It has been below 1% for the past three years.

There were 34,900 new arrears cases in Q3; this was down 2% on last quarter and 9% below Q3 2010.

Consequently, the total number of accounts in arrears at the end of the quarter also fell and at 324,200 was 3% down on Q2 and 6% below Q3 last year.

The FSA data shows the proportion of the residential loan book that is in arrears, and hence not fully performing, continued to fall, as it has for the last three years, to 2.72%. The number of new possessions in the quarter rose by 2% to 9,670; and arrears totalling £38m on 10,811 accounts were capitalised in Q3.

Commenting on the data, Capital Economics said: "FSA data released this morning suggest that credit conditions are acting as a brake on housing activity and therefore are probably putting downwards pressure on house prices. Consistent with that, the CLG house price index reported a 0.6%m/m fall in October."