Thu 11 Aug 2016 View all news articles

Mortgage arrears drop to record low level

Low mortgage rates and lender forbearance are helping borrowers stay out of debt and in their homes

The number of mortgages in arrears has dropped to its lowest level since records began, according to the Council of Mortgage Lenders.

The trade body said that at the end of June there were 92,500 mortgages in arrears of at least 2.5% of the balance, accounting for just 0.84% of all mortgages, and down from 95,900 at the end of March.

The number of mortgages in arrears was 13.4% lower than a year ago, when the total stood at 106,800, and is now at its lowest level since the run of figures began in 1994.

Repossessions down

The number of properties taken into possession also fell in the second quarter, to 1,900 (down from 2,100 in the first three months of the year).

There was a decline in both the numbers of owner-occupied (1,300, down from 1,500) and buy-to-let (500, down from 700) properties taken into possession (all figures rounded to nearest hundred).

The CML added that if the present trend continues, the number of mortgaged property repossessions this year is on course to be the lowest since 1982 (when there were 6.5 million mortgages, compared to 11.1 million today).

CML director general, Paul Smee, said: “Another welcome reduction in arrears and possessions shows that borrowers are continuing to prioritise their mortgage commitments and that lenders remain committed to helping them through a period of temporary difficulty, wherever possible.

“As ever, the key to success in dealing with any payment problems is to address them as soon as possible. Any borrowers anticipating difficulty in paying their mortgage should therefore speak to their lender at the earliest opportunity.”

Source: Your Mortgage

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