Third-quarter figures from the Council of Mortgage Lenders (CML) show a continuing fall in both repossessions and mortgage arrears.
At the end of the July – September period, the proportion of mortgages where the borrower was in arrears equal to 2.5 per cent or more of the total mortgage value was 1.12 per cent – down from 1.18 per cent in the second quarter. This is the lowest it’s been since the first quarter of 2008.
Between July and September lenders repossessed 5,000 properties – or 0.04 per cent of all mortgaged properties. This is the lowest quarterly proportion and number since quarterly records began in 2008.
Both the owner-occupier sector and the buy-to-let sector have seen falls in arrears and repossessions. Out of the total 5,000 repossessions, 1,100 were on buy-to-let mortgages – representing a slightly higher repossession rate of 0.07 per cent in buy-to-let than the overall and owner-occupier rate of 0.04 per cent.
CML director general Paul Smee comments:
“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.”
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