Mortgage lending statistics from the FSA show that the number of new possessions and new loans moving into arrears fell in Q2 by 9% and 14% respectively, although the total number of loans in arrears has risen by 34% since Q1 2008.
New arrears fell for a second quarter from 60,000 in Q1 2009 to 51,000 in Q2 2009 – a fall of 14%. Both quarters showed a steady decrease from 68,000 in Q4 2008.
With borrowers still struggling to clear their arrears, the total number of loan accounts in arrears has been steadily increasing since early 2007. At the end of Q2 2009 there were 403,000 loan accounts in arrears, an increase of 3,000 or 1% since Q1 2009, and an increase of 30% on a year earlier.
The proportion of the residential loan book that is in arrears, and hence not fully performing, rose to 3.66% at the end of Q2 2009, up 1.11% on a year earlier.
The numbers of new possessions has grown significantly since Q3 2007, but the sharply rising trend evident up to Q3 2008 has stabilised in the last three quarters. The number of new possessions in Q2 2009 (13,610) was 1,274 fewer than the 14,884 recorded for Q1 2009. New possessions in Q2 2009 were nonetheless 23% higher than a year earlier.
RICS senior economist Brigid O’Leary said: “Today’s figures suggest that lower mortgage rates have helped borrowers keep up with repayments while Government requirements for lenders to show greater forbearance is also having some effect.