Repossessions at lowest level for two years
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The Financial Services Authority has published its mortgage lending data for Q1 2010, which shows repossessions have fallen 11% and are at the lowest figure for two years.
For the last three quarters the total number of accounts in arrears has also fallen, by some 4% in Q1 to 362,000, the proportion of the residential loan book that is in arrears, and hence not fully performing, also fell for the third successive quarter, to 3.23%.
The number of new arrears cases continued the downward trend started last year, with a further reduction in the number in Q1 to 40,500.
The FSA figures also show the total value of outstanding loans is now £1,206bn, virtually unchanged from last quarter and new advances in the quarter totalled £32bn, 22% lower than in Q4, but much the same as the amount advanced in Q1 2009.
New commitments totalled £34bn, some 6% lower than last quarter and the share of lending for house purchase decreased from the peak reached last quarter, to account for 58% of new advances and 59% of new commitments in this latest quarter.
It also reveals that the proportion of new lending done at an LTV of more than 90% accounted for less than 2% of new advances for the third successive quarter and new lending with a combination of high LTVs and high income multiples again accounted for less than 1% of new lending in Q1.
The proportion of loans to borrowers with an impaired credit history was also little changed for the third quarter in succession at 0.35%.
Since the beginning of 2007, some 300 regulated mortgage lenders and administrators have been required to submit a Mortgage Lending & Administration Return each quarter, providing data on their mortgage lending activities.
The MLAR covers both regulated and non-regulated residential lending to individuals. Regulated loans are secured by a first charge on residential property, where the property is for the use of the borrower or a close relative. Non-regulated lending includes buy- to-let, second charge and, in some cases, further advances on loans that were originally taken out before regulation came into effect.
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Readers' comments (1)
Trevor Mealham INEA | 23 Jun 2010 4:41 pm
The budget failed to address the stamp duty levy at £250k where the levy jumps from 1% to 3%, as such this is stopping houses from rising and pulling prices that should be over the £250k level to offers lower.
The FTB exemption upto £250k only works if the FTB is not with a partner who has brought before, quite unlikely with the average FTB at 37 years old. A FTB incentive should have been introduced to help FTBs raise their deposit to release upward chains, for which those upward in the chains stamp duty would pay for such a scheme, but NO.
The government suspended HIPs which was a great move, but with lenders slow to lend agents are reporting street price wars where the lowest price will sell. With almost a 1/3rd post HIP homes additionally on the market, prices may be driven down as low as 10-15% further this year. We may see a return of repossessions as lending gets even tighter based on less equity in homes.
This was a VERY POOR budget. To restart the housing market would create more work and release mortgage funding from those downsizing which could then be reallocated to those wanting to upsize or borrow more.
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Regards,
Trevor Mealham
INEA mls (The Independent Network of Estate Agents)
T: 01233 633 633 M: 07767 366 399
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