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New mortgage lending has seen an increase of 20 % over the last 3 months.

In its quarterly report the FSA said that the UK mortgage market remained pretty flat over the last year – the total value of outstanding loans is now £1.2 trillion, an increase of 1 per cent compared to a year earlier.

But net mortgage lending increased by 20 % on Q2 2009 numbers to £40bn, but was still down on Q3 2008’s £61bn figures.

Repossessions totalled 14,000, a 2.8 per cent increase on Q2, but some 5 % below the peak at the start of the year.

The number of new arrears cases continued to fall, down by 10 per cent in the quarter to 46,000. At the end of Q3, the number of accounts in arrears had fallen to 395,000, a decrease of 2 per cent in the quarter, but 16 per cent higher than in Q3 2008.

The FSA says lending for house purchase has continued to represent an increasing share of new lending, accounting for 57 per cent of new advances and 62 per cent of new commitments in this latest quarter. Remortgages accounted for 34 per cent, the lowest proportion since the series began in 2007.