FSA Report On Mortgage Market
The latest Mortgage Lending & Administration Return (MLAR) from the Financial Services Authority reflects the recent goings-on in the residential lending market.
This second edition of the new quarterly report covers the period from Q1 2007 to the end of Q2 2008, and examines both regulated and non-regulated residential lending to individuals.
Key findings in the latest edition are:
- New lending peaked in Q3 2007 at £102 billion before declining to £72 billion in Q2 2008 (-26 per cent).
- The number of new loans with an LTV of 90 per cent or more has dropped from 15 per cent early last year to 10 per cent in Q 1 and 2 of 2008.
- Loans to borrowers with poor credit history dropped to 2.1 per cent of new lending in Q2 2008 from 3.4 per cent a year earlier.
- At the end of the second quarter of this year, there were 312,000 loan accounts in arrears. This was a rise of three per cent from the first quarter, and 16 per cent on a year before.
- The proportion of the residential loan book in arrears, and therefore not fully performing, increased to 2.58 per cent at the end of Q2 this year. This was a rise of 0.14 per cent over the quarter and 0.48 per cent from a year ago.
- There was a 71 per cent annual increase in the number of new possessions from 6,476 in Q1 2008 to 11,054 in Q2 2008.
IMLA Response
However, in connection with this last statistic, the Intermediary Mortgage Lenders Association (IMLA) commented:
"This figure has been somewhat sensationalised in the current environment. We already know possessions are increasing and we expect to see around 40,000 this year compared to 26,200 in 2007 - but this will still be well under one per cent of all mortgages outstanding.
"Lenders and indeed the government are working to keep people in their homes by offering better advice to those in difficulty and working to develop ways to avoid possession if at all possible.
"Talking up repossessions helps to further undermine confidence and it is important this is kept in perspective."
