CML comments on FSA third quarter mortgage statistics

The latest mortgage statistics from the FSA show that the proportion of mortgages with arrears of more than 1.5% of the balance have decreased slightly in the third quarter to 2.57% from 2.63%, with possessions slightly up from 13,600 to 14,000. Figures from the Council of Mortgage Lenders released last month show a larger decrease in arrears - down from 2.80% to 2.61% in the first mortgage market.

The FSA statistics cover a large proportion of second charge lending, which is excluded from the CML's equivalent figures (11,400 to 11,700 in the last quarter), and for this reason FSA possessions will always be substantially higher than the CML's.

According to the FSA, 60% of outstanding mortgages are on variable rates, compared to 51% one year ago. This demonstrates partly how popular tracker rates are now, but also - given the low volumes of new business over the past year - that those reverting off fixed rates are staying on standard variable rates because they are currently attractive.

Commenting on the data, CML director general Michael Coogan said:

"The FSA data reflects what our numbers have already portrayed. Arrears and possessions are lower than expected earlier in the year, and the majority of the population have been choosing to stay on their SVRs or move to trackers, rather than take out fixed rate mortgages.

"The fact that the CML figures on arrears fell faster than the FSA's may indicate that regulated and buy-to-let arrears are improving more quickly than arrears on secured loans which are not regulated in the same way."