13th November 2014
New figures from trade body the Council of Mortgage Lenders (CML) show a continuing reduction in the number of both repossessions and mortgages in arrears.
The statistics for the three months to the end of September highlight that the proportion of mortgages with arrears equivalent to 2.5% or more of the total mortgage value, was 1.12% – down from 1.18% in the second quarter and 1.33% in the third quarter of 2013. This is the lowest proportion since the first quarter of 2008, which registered 1.08%.
In numerical terms, this equates to 125,100 mortgages – down from 131,400 in the second quarter and 149,400 in the third quarter of 2013.
During the third quarter this year, the proportion of all mortgaged properties taken into possession by lenders was 0.04% – or some 5,000 properties, the lowest quarterly proportion and number since quarterly records began in 2008.
It compares with 0.05%, or 5,400 properties in the second quarter, and 0.06% – 7,200 properties – in the third quarter of 2013.
The CML said within the overall reported totals, in both the owner-occupier and the buy-to-let sectors have experienced reductions in both arrears and repossessions.
It added, that out of the total 5,000 repossessions, 1,100 were on buy-to-let mortgages, representing a slightly higher repossession rate of 0.07% in buy-to-let than the overall and owner-occupier rate of 0.04%.
Commenting on the latest trends, CML director general Paul Smee said: “Low interest rates, supported by intelligent communication and forbearance, mean that mortgage arrears and repossessions continue to decline.
“Encouragingly, recent research also suggests that many households are preparing themselves for the prospect of higher interest rates, so we expect any uptick in payment difficulties to be relatively muted if and when rates do begin rising. But a key activity for lenders now is considering how best to support their borrowers in planning ahead for a time when debt servicing costs are higher than they are now.”