FCA: Lending at five-year high in the third quarter

Mortgage lenders advanced more money in the third quarter than they have in any other quarter for five years, according to figures released today by the FCA.

Gross advances of £49.5bn were recorded in Q3 2013 – the highest total since Q3 2008 – up 25 per cent on the £41.6bn advanced in the same period last year.

The value of residential loan amounts outstanding rose 0.3 per cent between Q2 and Q3, reaching £1.2bn – a jump of 0.5 per cent from the same time period last year.

Net lending was up 29 per cent year-on-year in the third quarter, from £5.1bn in Q3 2012 to £7.2bn in the third quarter of this year.

First-time buyers accounted for a fifth of gross advances in Q3, with a total of £9.9bn advanced, while buy-to-let customers borrowed a total of £5.9bn or 12 per cent of gross advances.

The figures show just 0.45 per cent – £2.2bn – of gross lending was advanced to borrowers with a deposit of five per cent, compared with 0.41 per cent in Q3 2012. 

Capital Economics chief property economist Ed Stansfield says: ”Six months after the launch of Help to Buy, detailed mortgage lending statistics show little evidence of a rise in the share of new mortgages being advanced on the basis of a 5 per cent deposit.”

The volume of new repossession cases in the third quarter of 2013 dropped 14 per cent in a year to 7,349.

New arrears cases also fell in both volume and value in the third quarter this year.

The number of new arrears cases dropped 7.9 per cent to 29,900 – the lowest level since the FCA began recording figures in 2007. The value of new arrears cases fell 18 per cent from Q3 2012 to £56m.

The percentage of total loans outstanding currently in arrears dropped to 1.97 per cent in the third quarter, compared with 2.06 in Q2.