New advances in the quarter amounted to £40bn, 8% lower than in Q3 but some 9% higher than the amount advanced in Q4 2010.
The overall average interest rate on new advances continued to fall during the quarter, down from 3.59% to 3.49%, a new low for the series. The reduction was a result of a fall in the rate for fixed rate lending more than offsetting a small increase in the variable rate, reveals the latest Mortgage Market Review.
New commitments totalled £37bn in the quarter, 11% down on Q3 but 7% higher than in Q4 last year. Lending for house purchase accounted for 61% of new advances, up on Q3, and 58% of commitments, a small decrease from last quarter. The proportion of advances for remortgages (32%) was much as in Q3, though there was an increase in commitments from 32% to 34%.
The proportion of new lending done at an LTV of more than 90% continued to be below 2% in Q4, as it was throughout 2011.
New lending with a combination of high LTV and high income multiple rose slightly in the final quarter of the year and accounted for just over 1% of new lending.
The proportion of loans to borrowers with an impaired credit history remained at 0.4% for the third successive quarter. It has been below 1% since the end of 2008. In Q4 there were 34,600 new arrears cases which was down 1% on last quarter and 14% lower than in Q4 last year.
Consequently, the total number of accounts in arrears at the end of the quarter also fell and, at 313,200, was 3% down on Q3 and 9% below Q4 2010. The proportion of the residential loan book that is in arrears, and hence not fully performing also continued on a downward trend, to 2.61% from 2.72% last quarter.
The number of new possessions in the quarter fell by 9% to 8,827. Arrears totalling £36m on 9,815 accounts were capitalised in Q4.
