Arrears and repossessions still falling
At the end of the third quarter, the proportion of mortgages with arrears equivalent to 2.5% or more of the total mortgage value was 1.12% – down from 1.18% in the second quarter and 1.33% in the third quarter of last year.
This is the lowest proportion since the first quarter of 2008. 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. In Q3, the proportion of possessed properties by lenders was 0.04%, or 5,000.
This compares with 5,400 properties in the second quarter, and 7,200 properties in Q3 2013.
Both the owner-occupier sector and the buy-to-let sector have experienced reductions in both 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% in buy-to-let than the owner-occupier rate of 0.04%.
CML director general Paul Smee, said:
“Low interest rates, supported by intelligent communication and forbearance, mean that mortgage arrears and repossessions continue to decline.
“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.”