Statistics from the Council of Mortgage Lenders reveals that the recovery of the UK housing market has also benefitted homeowners, with repossessions and arrears both on the decline. Repossessions climbed a little, from 6,100 in the fourth quarter of 2013 to 6,400 in the first quarter of 2014, but despite the seasonal rise have fallen 20 per cent from the first quarter of 2013.
Both the number and the proportion of mortgages in arrears also dropped during the first three months of the year, according to the CML.
Arrears of more than 2.5 per cent of the mortgage balance were at their lowest level since the second quarter of 2008. The number of mortgages in arrears fell in all arrears bands, including the most serious band – at the end of the first quarter, 1 in 400 mortgages had arrears equivalent to 10% or more of the mortgage balance.
CML director general Paul Smee comments: “The downward trend in the number of mortgages in arrears or ending in repossession is obviously very welcome. Repossession is absolutely the last resort – the aim is to keep people in their home and get their finances back on track wherever possible.
“Lenders fully recognise that behind the numbers, these are real households, with differing circumstances. Lenders try to ensure that all borrowers are treated fairly and sensitively. They continue to improve their practices to try to achieve the best outcomes when payment problems do occur. Combined with low interest rates and an improving jobs market, these strategies are clearly helping many households.”