Good news for the Market - with record low mortage arrears
The number of mortgages in arrears is now at its lowest level since records began more than 20 years ago.
Data from the Council of Mortgage Lenders shows that at the end of June there were 92,500 mortgages in arrears of at least 2.5 per cent of the balance. That represents a tiny 0.84 per cent of all mortgages.
That figure is down from 95,900 at the end of March and is 13.4 per cent lower than a year ago, when the total stood at 106,800.
It is now at its lowest level since the CML records for these figures began in 1994.
The number of properties taken into possession also fell in the second quarter, to 1,900 - that’s down from 2,100 in the first three months of the year.
There was a decline in both the numbers of owner-occupied repossessions (1,300, down from 1,500) and buy to let repossessions (500, down from 700).
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 6.5m mortgages, compared to 11.1m today.
“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” explains Paul Smee, CML director general.
Jonathan Harris, director of mortgage broker Anderson Harris, says the welcome fall in repossessions and arrears reflects rock-bottom interest rates and improving employment figures, as well as lenders prepared to be flexible and show forbearance.
“While it looks highly unlikely that interest rates will rise anytime soon, borrowers should still plan ahead and consider how they would cope with higher mortgage rates. For those who would struggle to pay their mortgage were interest rates to rise, a fixed rate makes a lot of sense, and there are some incredibly cheap deals available” he says.