The number of mortgages in arrears continued to fall in the second quarter of this year, according to the Council of Mortgage Lenders, and is now at its lowest level since records began more than 20 years ago.
Data showed that at the end of June there were 92,500 mortgages in arrears of at least 2.5 per cent of the balance, down from 95,900 at the end of March.
The number of mortgages in arrears was 13.4 per cent lower than a year ago, when the total stood at 106,800 - now at its lowest level since the run of figures began in 1994.
The number of properties taken into possession also fell in the second quarter, to 1,900 (down from 2,100 in the first three months of the year).
There was a decline in both the numbers of owner-occupied (1,300, down from 1,500) and buy-to-let (500, down from 700) properties taken into possession. 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 6.5 million mortgages, compared to 11.1 million today.
Ministry of Justice figures, due to be published soon are expected to reflect a pattern in which the number of mortgage possessions is significantly lower than in the rental sector.
Those figures showed there were 42,729 rental evictions in England and Wales in 2015, compared to 5,592 mortgaged property repossessions, even though the rented sector accounts for only around one-third of the housing stock.
CML director general Paul Smee said another reduction in arrears and possessions shows borrowers are continuing to prioritise their mortgage commitments and that lenders remain committed to helping them through a period of temporary difficulty, wherever possible.
Meanwhile, new figures from the Finance & Leasing Association showed the number of second-charge mortgage repossessions in the second quarter was 40, down 40.3 per cent on the same quarter in 2015.
Fiona Hoyle, head of consumer and mortgage finance at the FLA, said: “Second-charge mortgage providers continued to support customers in financial difficulty in the second quarter of 2016, while meeting the demands arising from the implementation of new systems following the market’s move to the FCA’s mortgage regime in late March.”
Jonathan Harris, director of mortgage broker Anderson Harris, said the low level of arrears reflects rock-bottom interest rates and improving employment figures, as well as lenders prepared to be flexible and show forbearance.
“However, there is no room for complacency,” he noted. “There are still many homeowners being repossessed or finding themselves in arrears on their mortgage each year, which begs the question: what will happen when interest rates move the other way and start to rise?”
He urged borrowers to thing ahead and keep their lender in the loop if they are struggling with mortgage payments.
peter.walker@ft.com
