Home repossessions as well as mortgage arrears have hit long-term lows last year as interest rates remain suppressed and personal income grows.
The latest data from the Council of Mortgage Lenders shows a 26 per cent slump in repossessions and a nearly 20 per cent decrease in mortgage arrears as compared to the end of 2013.
A total of 21,000 homes were repossessed in 2014, of which 16,100 were owner-occupied and only 4,900 were buy-to-let properties.
The number of mortgages in arrears was 116,800. There were declines in all arrear bands, even in the most severe one (arrears over 10 per cent).
“The relatively low rate of repossession among owner-occupiers – around 1 in 600 mortgages last year – should help to reassure borrowers that, if they do face payment difficulties, lenders will work with them to try to resolve their problems. Repossession is only ever a last resort, “CML director general Paul Smee commented.
While the current situation is favourable, changes are bound to happen in the future and people should be ready to bear the cost.
The CML warns borrowers to prepare for a potential rise in interest rates to ensure they will be able to cope with the added pressure on their household finances without having to delay payments.
