UK mortgage arrears fall to record low

The number of mortgages in arrears fell slightly in the first quarter of 2017, and is down on both the previous quarter and a year ago, according to the Council of Mortgage Lenders.

There were 92,600 mortgages in arrears, representing 0.84 per cent of all mortgages, the lowest quarterly rate on record.

Within the total stock of arrears cases, all arrears bands except the most serious showed a fall. However, the stock of cases with arrears of over 10 per cent of the mortgage balance rose to 26,500. Although this is a small number within the total mortgage market, it does suggest that there is a minority cohort of borrowers for whom arrears are worsening.

“This positive picture of mortgage performance is good news, and reflects a continuing benign interest rate and employment environment,” comments Paul Smee, CML director general. “However, it is important that borrowers continue to think about the future, and how they would cope with less positive conditions, even if that scenario seems distant.

“Lenders will always work with borrowers to try to help them through the inevitable periods of difficulty that life may throw at them, such as periods of unemployment, illness or relationship breakdown. So anyone facing difficulty should not hesitate to make contact with their lender, who will wish to help them resolve their difficulties and remain in their home wherever possible.”


UK repossessions fell again in 2016

13th February 2017

The number of properties repossessed in the UK fell again in 2016.

The latest figures from the Council of Mortgage Lenders show that the number declined by almost 25 per cent. Last year’s total of 7,700 cases of possession compared with 10,200 in 2015, and was the lowest number since 1982. Over the course of 2016, the number of mortgages in arrears also fell by 7 per cent.

The number of possession cases declined in the fourth quarter of 2016, as well as over the year as a whole. In the final three months of the year, 1,800 properties were taken into possession, down from 1,900 in the preceding quarter and 2,200 in the final quarter of 2015.

However, although the data show a clear underlying downward trend, some care is needed in making annual comparisons, notes the CML. The timing of some possessions last year may have been affected by a court case that caused lenders to review their processes.

At the end of last year, there were 94,100 mortgages with arrears of 2.5 per cent or more of the outstanding balance, a slight increase on the total of 93,300 at the end of the third quarter. But that compared to a total of 101,700 at the end of 2015.

Across the market as a whole, there was “significant improvement” in the number of mortgages with more modest levels of arrears (up to 5 per cent of the outstanding balance). There was, however, an increase over 2016 in the number of mortgages with arrears of more than 10 per cent of the balance, from 23,700 to 26,000.

Commenting on the data, CML director general Paul Smee says: “It is encouraging to see another improvement in arrears and possessions during a year in which borrowers were clearly helped by the downward trend in mortgage rates.”

However, mortgage rates are not expected to stay low for long.

“Customers do need to be ready for a time when the outlook may not be so benign, with pressure on real incomes increasing and as interest rates begin to move upwards again,” adds Smee. “As ever, borrowers who fear they may miss a payment should speak to their lender. Lenders remain committed to helping borrowers work through any period of temporary payment difficulty and remain in their home wherever possible.”