Arrears and repossessions continue to fall
In that period the repossession rate was 0.02% – equivalent to just 1 in 5,000 mortgages. Arrears also continued to fall.
There were 2,500 properties taken into possession in the second quarter, down from 3,000 the previous quarter and 5,400 in the second quarter of last year. Of these, 1,800 were in the owner-occupier market, and 700 in the buy-to-let market.
This equates to a repossession rate of 0.02% – equivalent to just 1 in 5,000 mortgages.
However, as in the first quarter, the current flow of repossessions probably continues to remain lower than the underlying trend would imply, even though arrears are also falling.
In terms of arrears, the total number of mortgages with arrears equivalent to 2.5% or more of the mortgage balance was 106,400.This equates to 0.96% of all mortgages – again, the lowest rate since quarterly records began in 2008.
Of all loans with arrears of more than 2.5% of balance, 100,700 were owner-occupier, and 5,700 buy-to-let.
In both the owner-occupier and buy-to-let markets, the number and proportion of mortgages in arrears fell or remained static in all arrears bands – none experienced a worsening.
Commenting on the data, CML director general Paul Smee said: “Across all measures, mortgage arrears and repossessions are continuing to improve. We continue to see some amplification of the downward trend in repossessions, which may bring into question our repossessions forecast for 2015 as a whole.
“This trend is very welcome. Low interest rates are acting as a significant support for home-owners in general, and are likely to be helping to stave off low level arrears for stretched households in particular.
“As ever, we urge borrowers to think ahead to when interest rates rise, and to contact their lender without delay if they are in difficulty – prompt action helps to prevent problems worsening.”
Jonathan Harris, director of mortgage broker Anderson Harris, said: “Repossessions continue to fall while the number of borrowers in arrears has also declined. This is to be expected with rock-bottom interest rates and improving employment figures, as well as lenders being prepared to be flexible and show forbearance.
“However, there are still tens of thousands of homeowners being repossessed or finding themselves in arrears on their mortgage each year, which begs the question: what will happen when interest rates do start to rise? How will people cope? We suspect that when it comes to their finances there are many people teetering on a knife edge and rate rises could easily push them over.”