But in its latest Mortgage Lending data for the UK the FSA reports that deals of 90% LTV or higher accounted for just over 2% of all loans in Q3.
New lending with a combination of high LTVs and high income multiples continues to account for just over 1% of new lending as it did in Q2.
New advances in the quarter totalled £41bn, 12% higher than in Q2 but much the same as the amount advanced in Q3 2009.
New commitments totalled £38bn, 6% down on the previous quarter but again in line with Q3 last year.
Lending for house purchase accounted for 64% of new advances, the highest percentage in the series, and 61% of new commitments.
Paul Diggle, property economist at Capital Economics, says: “There was some better news for borrowers with a history of impaired credit, who accounted for 0.44% of new mortgages in Q3. Although still far below the 2.73% peak in 2007, that was a two-year high.
He adds: “Surprisingly, the FSA data show that some 20.4% of new mortgages in Q3 were lent without the borrower providing evidence of their income.
“Although down considerably on the 45.5% seen just before the crash, anecdotal evidence would suggest a far lower figure. However, given the FSA’s proposed ban on self-certification mortgages, it may only be a matter of time before these mortgages disappear completely.
“A similar fate may await interest-only mortgages. These accounted for 31.8% of new advances in the third quarter, down from 33.4% in Q2 and over 50% of all mortgage advances in early 2008.”
The total value of outstanding loans is £1,220bn, an increase of less than 1% on last quarter.
The number of new arrears cases has fallen in each of the last seven quarters and was down 2% to 36,600 in Q3.
The total number of accounts in arrears has also continued to fall, each quarter over the past year, decreasing by 2% in Q3 to 346,000.
Consequently, the proportion of the residential loan book that is in arrears, and hence not fully performing, also fell and now stands at 2.97%.
The number of new possessions in the quarter continued to decline, decreasing by 8% to 9,145, the lowest figure since the end of 2007.
Arrears totalling £44m on 16,184 accounts were capitalised in Q3.