Mortgage arrears are sticking and repossessions up says FSA report out today

The report shows the total value of outstanding loans is £1,178bn, an increase of 7.5% compared to a year earlier. But quarterly growth continues to slow, with a Q2 increase of just 1%;

New lending peaked in Q3 last year at £102bn before declining to £72bn in Q2, leaving gross lending 26% lower than a year earlier.

Loans to borrowers with an impaired credit history represented 2.1% of new lending in Q2, compared to 3.4% a year earlier.

While the number of new arrears cases has stayed constant at around 54,000 each quarter since early 2007 consumers are increasingly struggling to clear their arrears and consequently the total number of accounts in arrears is increasing. At the end of Q2 there were 312,000 loan accounts in arrears, an increase of 3% on Q1 and 16% up on a year earlier, with the total amount of arrears now standing at £1.6bn.

Numbers of new possessions have grown significantly since Q3 last year, with the 11,054 new cases in Q2 (after 9172 in Q1) being 71% higher than a year earlier.