The total value of outstanding loans in the second quarter of 2011 increased by 0.2% from last quarter to £1,214 billion, the FSA has reported.

New advances in the quarter totalled £37 billion, 11% higher than in the first quarter of the year.

New commitments totalled £40 billion, 13% up on last quarter but 3% lower than Q2 last year.

Lending for house purchase accounted for over 59% of new advances and 61% of new commitments, both up on last quarter due to a reduction in remortgage business, the FSA said.

The proportion of new lending done at an LTV of more than 90% rose slightly, but is still below 2%. New lending with a combination of high LTV and high income multiple remained unchanged from last quarter at under 1% of new lending.

The proportion of loans to borrowers with an impaired credit history was little changed at 0.4% it has been below 1% since the end of 2008.

The number of new arrears cases in Q2 was 35,700, which was little changed from last quarter and 4% below Q2 2010. Meanwhile, the total number of accounts in arrears at the end of the quarter was 1% down on Q1 and 6% down on last year at 332,700.

The proportion of the residential loan book that is in arrears, and hence not fully performing, continued to fall and at 2.81% was the lowest proportion for three years.

The number of new possessions in the quarter fell by 1% in the quarter to 9,494 and arrears totalling £37 million on 12,857 accounts were capitalised in Q2.