FSA Figures Show Decreasing Loan Arrears And Increasing Loan Amounts
New figures, which have been released by the Financial Services Authority (FSA), have shown that whilst the level and number of new loans for house purchase have increased steadily over the course of this year, the outstanding level of loan arrears and new arrears cases has actually decreased, despite the effects of the credit crunch, banking crisis and recession.
From early 2007, companies involved in mortgage loan business have filed a return to the FSA once every three months, giving details of their lending activities and these figures have formed the basis of the report.
The report covers all regulated loans, such as mortgages and home owner loans secured by a first legal charge and some further advances on existing loans, as well as non regulated home owner loans, such as buy to let loans and second charge lending through secured loans.
Since August 2008, the FSA has published the results from the regulatory reporting submitted by lenders and the latest set of results have revealed that the total amount of outstanding home owner loans has increased slightly over the course of the past twelve months to £1,203 billion, whilst the level of new arrears cases on loans has actually fallen by around 10 per cent during the last three months, to 46,000.
Notable changes in the FSA figures are a serious reduction in the number of secured loans advanced at a loan to value of more than 90 per cent, which only accounted for around 2 per cent of new loans. similarly, high income multiples combined with high loan to value levels accounted for just 1 per cent and bad credit loans only accounted for 0.4 per cent of all loans, which highlights the changing attitudes of lenders taking a more cautious approach to lending and becoming more selective about who they are prepared to offer loans to.
