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£40bn worth of mortgages in the pipeline, says FSA

Lenders have agreed to advance £40bn worth of mortgages in the coming months, up 13% on the amount agreed in Q1, according to the Financial Services Authority’s latest mortgage lending data.

The statistics show that in Q2 2011, new commitments – the amount of new lending that lenders have agreed to advance in the coming months – totalled £40bn, 13% up on Q1 but 3% down on Q2 2010.

It also reveals that new advances, or gross lending, in Q2 totalled £37bn, 11% higher than in Q1 and almost unchanged on the amount advanced in Q2 2010.

The breakdown of the purpose of new lending shows a rise in lending for house purchase but a decline in remortgage business.

The proportion of lending for house purchase, which includes buy-to-let purchases, increased from 54% in Q1 to 59% in Q2, while the proportion of lending to first-time buyers rose from 14% in Q1 to 16% in Q2.

Gross advances for house purchase also increased in value terms, up by 22% on Q1’s figure to reach £21.6bn.

Remortgage business fell from 38% of new lending in Q1 to 34% in Q2, but remains above the 30% it accounted for in Q2 2010.  

The data also shows a rise in buy-to-let lending, with the proportion of new lending for buy-to-let increasing in each of the last three quarters to account for 8.9% of overall residential lending in Q2.

In value terms there was a 19% increase in Q2 over the amount advanced in Q1 and at £3.2bn this was the largest quarterly amount lent since Q4 2008.

In terms of the total outstanding loan book, the proportion of buy-to-let loan balances has also been increasing over the last few quarters and now stands at 12.08%, the highest percentage since the series started.

In addition, the proportion of new lending at fixed rates increased again in Q2 to 56%, up from a low of 37% in Q1 2010.

The average rate on new advances rose from 3.65% in Q1 to 3.81% in Q2, which the FSA puts down to the increase in fixed rate lending and a rise in the average fixed rate from 4.24% in Q1 to 4.43% in Q2.


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Guide: Johnson Fleming produces auto-enrolment checklist

For a job as big as managing the auto-enrolment changes, it’s important to know what has been completed and what still lies in front of you to give you the reassurance that everything is in hand. Getting the planning and project management right at the outset can help you see the path ahead and ensure everyone knows their roles and responsibilities. To help with this, Johnson Fleming has produced a checklist outlining every step that needs to be taken when preparing for auto-enrolment.


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