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Mortgage arrears drop again

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13/11/2015
Borrowers coping well with mortgage repayments but urged to remember that interest rates could rise
Mortgage arrears drop again

Mortgage arrears continued to fall in the third quarter of this year, according to the latest figures from the Council of Mortgage Lenders.

It said there were 104,600 loans (0.94% of all mortgages) with arrears representing more than 2.5% of the mortgage balance at the end of September. This was 14% lower than at the same point in 2014, and nearly 2% lower than at the end of the second quarter.

There were slightly more loans in the most serious category of arrears – those in arrears of 10% or more of their outstanding mortgage balance, which totalled 23,700. However this figure is still nearly 7% lower than the 25,400 at the end of September last year.

Overall the quarterly repossession and arrears rates are at their lowest levels since the CML’s quarterly records began, with 2,500 properties taken into possession in the third quarter, the same number as in the second quarter of the year.

Commenting on the data, CML director general Paul Smee said:

“Supported by low interest rates and an improving jobs market, mortgage arrears continue to fall and repossessions are stable. Lenders are committed to working with borrowers to resolve their financial difficulties rather than take possession wherever this is realistic.

“Looking ahead, there is possibly a risk that people will postpone thinking about the prospect of higher payments as the timing of rate rises continues to stretch beyond previous expectations. But we would urge all borrowers to plan ahead, as prevention is better than cure.”

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