Mortgage arrears and repossessions continue to decline

Published on

Council of Mortgage Lenders

There was a continuing reduction in the number of both repossessions and mortgages in arrears, across all categories during the third quarter of 2014.

The Council of Mortgage Lenders (CML) said that at the end of the third quarter, the proportion of mortgages with arrears equivalent to 2.5% or more of the total mortgage value was 1.12% – down from 1.18% in the second quarter and 1.33% in the third quarter of last year. This is the lowest proportion since the first quarter of 2008 (1.08%).

In numerical terms, this equates to 125,100 mortgages – down from 131,400 in the second quarter and 149,400 in the third quarter of 2013.

During the third quarter, the proportion of all mortgaged properties taken into possession by lenders was 0.04% (5,000 properties). This is the lowest quarterly proportion and number since quarterly records began in 2008. It compares with 0.05% (5,400 properties) in the second quarter, and 0.06% (7,200 properties) in the third quarter of 2013.

Within the overall reported totals, both the owner-occupier sector and the buy-to-let sector have experienced reductions in both arrears and repossessions. Out of the total 5,000 repossessions, 1,100 were on buy-to-let mortgages, unsurprisingly representing a slightly higher repossession rate of 0.07% in buy-to-let than the overall and owner-occupier rate of 0.04%.

Paul Smee, the CML’s director general, said: “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.”

Latest POLL

COMMENT ON MORTGAGE SOUP

We want to hear from you!
Leave a comment and get the conversation started.
You need to register to post, so please login or sign up below.

Latest articles

Advice Guru partners with Pure Retirement to support broker education

Financial adviser learning platform Advice Guru has announced a new sponsorship partnership with Pure...

Nationwide ups LTV limits for interest-only and foreign national borrowers

Nationwide has announced changes to its mortgage lending criteria, increasing the maximum loan-to-value (LTV)...

Lloyds expects swell in completions ahead of stamp duty deadline

Lloyds Banking Group anticipates a 50% growth in property completions this month as buyers...

Satchell the latest to leave HTB bridging division

Lorenzo Satchell has become the latest senior member of the bridging team at Hampshire...

Other news

Advice Guru partners with Pure Retirement to support broker education

Financial adviser learning platform Advice Guru has announced a new sponsorship partnership with Pure...

Nationwide ups LTV limits for interest-only and foreign national borrowers

Nationwide has announced changes to its mortgage lending criteria, increasing the maximum loan-to-value (LTV)...

Lloyds expects swell in completions ahead of stamp duty deadline

Lloyds Banking Group anticipates a 50% growth in property completions this month as buyers...