The number of new arrears cases have fallen for the sixth consecutive quarter, according to the latest mortgage lending statistics from the FSA.
The number of new cases fell 8 per cent from 40,544 in the first quarter of 2010 to 37,248 in the second quarter.
The total number of arrears cases also fell, with the number decreasing for the fourth consecutive quarter. Total figures fell from 361,798 in the first quarter to 351,123 in the second quarter of 2010.
The number of new possessions in the quarter continued to decline, decreasing by 5 per cent from 10,449 to 9,978, the lowest figure for over two years.
According to the data, the total value of outstanding loans is now £1,209bn, which is little changed from the last quarter.
New advances in the quarter totalled £36.4bn, 14 per cent higher than the £32bn registered in the first quarter of 2010 and 8 per cent higher than the £33.8bn advanced in the second quarter of 2009.
New commitments totalled £41bn, 20 per cent up on the previous quarter. when the total value of commitments reached £33.7bn.
The share of lending for house purchase recovered from the dip last quarter, to account for 61 per cent of new advances and 63 per cent of new commitments in the second quarter.
The proportion of new lending done at a loan-to-value of more than 90 per cent accounted for just over 2 per cent of new advances.