New advances rise by 7pc

Despite the quarterly rise new advances were 9% lower than in quarter three last year.

New commitments totalled £36bn in the quarter which was down 10% from last quarter and 14% lower than in the same quarter of last year.

And the overall average interest rate on new advances for both variable and fixed rate lending increased from 3.78% last quarter to 3.89% this quarter.

Lending for house purchases accounted for the highest proportion of new advances seen in this series at 66%.

This was up on both last quarter (62%) and on quarter three last year (60%).

Consequently the proportion of advances for remortgages was the lowest ever at 27% and the figure for commitments for house purchase was also a series high.

The proportion of new lending done at a loan to value of more than 90% remained above 2% for the third successive quarter.

While new lending with a combination of high LTV and high income multiples showed a further small upward move but remained low in historic terms at 1.4% of new lending.

The proportion of loans to borrowers with an impaired credit history remained at the same low level for three quarters in succession (0.3%).

There were 35,900 new arrears cases in quarter three which was an increase of 4% on last quarter and 3% on quarter three last year.

Although the total number of accounts in arrears at the end of the quarter rose by 2% to 303,200 this was 7% less than the 324,300 accounts in quarter three 2011.

The proportion of the residential loan book that is in arrears, and hence not fully performing, was little changed from last quarter at 2.46% in quarter three compared to 2.45% in quarter two.

Overall arrears totalling £27m on 7,644 accounts were capitalised in quarter three and the number of new possessions in the quarter fell by 2% to 8,521.