MortgagesMay 14 2015

Repossessions fall in Q1: CML

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Repossessions fall in Q1: CML

The number and proportion of mortgages in arrears or ending in repossession fell during the first quarter, according to new figures from the Council of Mortgage Lenders.

A decline was experienced in all arrears bands and across both owner-occupier and buy-to-let lending. The total proportion of all mortgages with arrears equivalent to more than 2.5 per cent of the mortgage balance was 1.03 per cent.

This was down marginally from 1.05 per cent in the fourth quarter of 2014 and well down on the 1.24 per cent recorded at the same time last year.

This means that there were 113,900 loans in arrears in the first three months of this year. Of these, just 24,400 were in the most severe arrears band - more than 10 per cent of balance - equating to 0.22 per cent of all mortgages.

This is the smallest number and proportion of mortgages in the most serious arrears band since the end of 2008.

The proportion of mortgages resulting in repossession during the first quarter was 0.03 per cent, down from 0.04 per cent in the fourth quarter of 2014 and 0.06 per cent in the first quarter of last year.

The number of repossessions was 3,100 - down from 4,200 in the fourth quarter of last year and 6,400 in the first quarter of 2014.

Paul Smee, CML director general, said that although complacency would be misplaced, the underlying picture continues to be one of improvement and a continuing reduction in mortgage arrears and repossessions.

“The message remains the same: don’t delay in contacting your lender if you are experiencing temporary payment problems, as lenders want to help you resolve them, and will only take possession of property as a last resort.”

Jonathan Harris, director of mortgage broker Anderson Harris, commented that the trend is not altogether surprising, given rock-bottom interest rates and improving employment numbers, as well as lenders prepared to be flexible and show forbearance.

“However, there are still thousands of homeowners being repossessed each year, which begs the question: what will happen when interest rates do start to rise?

“Even though we have had a benign interest rate environment for some years now, there are likely to be people whose finances are teetering on a knife edge and rate rises could easily push them over.”

peter.walker@ft.com