Numbers of repossessions and mortgages in arrears have continued to fall, and the latest statistics mark the lowest proportion of mortgages with arrears since the first quarter of 2008, according to the Council of Mortgage Lenders.
At the end of the third quarter, the proportion of mortgages with arrears equivalent to 2.5 per cent or more of the total mortgage value was 1.12 per cent; down from 1.18 per cent in the second quarter and 1.33 per cent in the third quarter of last year.
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.
Also during the third quarter, the proportion of all mortgaged properties taken into possession by lenders was 0.04 per cent (5,000 properties).
This is also the lowest quarterly proportion and number since quarterly records began in 2008. It compares with 0.05 per cent (5,400 properties) in the second quarter, and 0.06 per cent (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 experienced reductions in arrears and repossessions.
Out of the total 5,000 repossessions, 1,100 were on buy-to-let mortgages, representing a slightly higher repossession rate of 0.07 per cent in buy-to-let than the overall and owner-occupier rate of 0.04 per cent.
Paul Smee, CML director general, stated that low interest rates, supported by intelligent communication and forbearance, have been behind the decline in mortgage arrears and repossessions.
“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.”