The 23-year-old has admitted in a recent interview that she has spent the night with James in the past week.
“He did spend the night with me yes,' she said, 'but it's not something that's happening all the time.”
BILLIE FAIERS TAKES SELFIE WITH FERNE MCCANN AND LYDIA BRIGHT
Lydia continued, telling the Mail Online: “The whole cast got back from Ibiza two days ago and since we've been back, he's stayed over once.
"We're not official. I'm not officially with anyone. I’m just letting things pan out and seeing where it takes me.
“You have to bear in mind that while I saw James a lot when we filmed the last series, I haven't really seen him much since then. We've spent a lot of time apart.
“To be honest, if it weren't for the show, I don't know if we’d be in a place where we’d be thinking about getting back together.
“For all I know, we may have never bumped into each other again. But because of TOWIE, we find ourselves in these situations.”
In the final episode of the last series of TOWIE, we saw Arg attempt to win back high-school sweetheart Lydia with a pair of Manolo Blahnik shoes.
The pair split in 2012 after it was revealed that Arg had cheated on girlfriend Lydia.
The blonde boutique owner then dated co-star Tom Kilbey whereas Arg had an on/off romance with Gemma Collins.
Have you ever gone back to an ex? Let us know in the comments box below.