Repossessions slow down in Q3
And in the first six months of the year the number of cases of possession totalled 15,700, the lowest number since the second half of 2007 when there were 13,100 cases.
The CML’s head of policy Jackie Bennett said: “Given the pressures on household incomes the continuing modest decline in arrears and possessions is welcome.
“Low interest rates and lower than expected unemployment are providing some relief for households and borrowers are continuing to prioritise mortgage payments while lenders are showing forbearance where it is viable.”
The number of mortgages in arrears followed this trend in quarter two with 157,700 mortgages falling into arrears of 2.5% or more of the balance down from 159,700 at the end of March and the lowest number since quarter three 2008.
Within the total number of mortgages in arrears at the end of June, 80,800 had arrears of more than 2.5% but less than 5% of the balance, 31,600 were in the range of 5-7.5% of the balance, 15,000 at between 7.5-10% of the balance and 30,300 with arrears of 10% or more of the balance.
The CML’s most recent forecast for 2013 predicts there will be 35,000 cases of possession during the year with 160,000 mortgages ending the year in arrears of more than 2.5% of the balance.
Bennett said: “Yesterday’s message from the Bank of England provides some encouragement to those borrowers who are struggling that any rise from the current historically low Bank rate will be linked to an improvement in the wider economy. “As ever the key message for those borrowers is that they should talk to their lender as soon as possible if they believe they are in danger of missing a mortgage payment.”
Bennett said lenders want to keep people in their homes where possible but borrowers need to come forward early to work through a “tailored” solution for their circumstances.
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: ‘It is excellent news that the number of repossessions continues to fall along with the number of mortgages in arrears.”
But he said the fact that there are any borrowers who are struggling when interest rates are at record lows is cause for concern.
He said: “Yesterday’s announcement from the Bank of England that interest rates are unlikely to rise until the third quarter of 2016 will provide a glimmer of hope to those struggling to pay their mortgages.”
Richard Sexton, director of e.surv chartered surveyors, said: “Falling arrears are another siren of the economic recovery.
“The improvements in the economy have dragged more homeowners out of the red but the number of borrowers in severe arrears is at a record high. Severe arrears cases have risen by 50% since the third quarter of 2008.
“These borrowers have been the victims of the squeeze on living standards that have taken grip since 2008. Personal finances have been suffocated by high inflation and negligible growth in salaries, and a number of people have yet to see the economic recovery translate into a tangible improvement in their finances.”