Repossessions fell to the lowest level for six years in 2013, according to the latest data from the Council of Mortgage Lenders (CML).
This means that the number of mortgage borrowers who were unable to make their repayments and had their homes repossessed in 2013 dropped to a level not seen since before the recession began, decreasing to a total of 28,900 repossessions, compared with 33,900 in 2012.
Low interest rates, an increase in employment and effective arrears management have been credit for the improvement.
Mortgage arrears have also declined. As at the end of 2013, 1.29 per cent of all mortgages were in arrears to the value of at least 2.5 per cent of the loan balance (that is, at least £2,500 arrears on a £100,000 loan). This compares with 1.40 per cent of mortgages at the end of 2012, and a peak of 1.88 per cent in the second quarter of 2009.
There has been a decline in the number of arrears cases across all categories, including the deepest arrears band of 10 per cent or more of the mortgage balance. This arrears band fell year-on-year for the first time since the third quarter of 2010.
Richard Sexton, director of e.surv chartered surveyors, said: “Falling homeowner arrears and repossessions are another barometer that underlines the steady economic recovery. As the economy makes strides back to health, we’re seeing a tangible impact for many ordinary households up and down the country, with repossession cases at their lowest level since 2007. Low interest rates and a stronger jobs market are helping people climb out of the red and stay in their homes. For the most squeezed households at the bottom the mist is finally starting to lift too, and the number of borrowers in severe arrears has fallen for the first time year-on-year since 2010.”
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