Arrears and repossessions continue to fall

Arrears and repossessions continue to fall

Council of Mortgage Lenders has released data which shows that there was a fall during Q1 in the number and the proportion of mortgages in arrears or ending in repossession.

A decline was experienced in all arrears bands, and across both owner-occupier and buy-to-let lending.

The total proportion of all mortgages with arrears equivalent to more than 2.5% of the mortgage balance was 1.03% at the end of the first quarter. This was down from 1.05% in the fourth quarter of 2014, and well down on the 1.24% recorded at the same time last year.

In numerical terms, there were 113,900 loans in arrears. Of these, just 24,400 were in the most severe arrears band (more than 10% of balance), equating to 0.22% of all mortgages. This is the smallest number and proportion of mortgages in the most serious arrears band since the end of 2008.

CML director general Paul Smee said: "Although complacency would be misplaced, the underlying picture continues to be one of improvement and a continuing reduction in mortgage arrears and repossessions. The message remains the same: don't delay in contacting your lender if you are experiencing temporary payment problems, as lenders want to help you resolve them, and will only take possession of property as a last resort."


Brian Murphy, Head of Lending at Mortgage Advice Bureau (MAB), comments: “The low interest rate environment has played a big role in reducing cases of arrears and repossessions among mortgage borrowers. Today’s data shows the picture continuing to improve and suggests that, on the whole, households are increasingly comfortable with managing their borrowing commitments without falling into difficulties.

The big challenge for industry will be to keep arrears and repossessions low with a higher base rate to contend with. Yesterday’s notice from the Bank of England of a potential rate rise in early 2016 still gives mortgage holders plenty of time to review their current deals and lock into low rates if it suits their circumstances.

Affordability checks will be a big help in making sure new borrowing commitments don’t tip household budgets over the edge when rates start to climb. If borrowers find their repayments become harder to manage, they should not hesitate before contacting their existing lender or exploring wider options with the help of a broker.”

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Tony Gimple
Tony Gimple 09 Dec 2017

Linking professionalism to limited company borrowing is a flawed concept. Despite S24 etc., limited companies are the most tax inefficient way of running a property business and leave borrowers seriously...

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Evelyn Attwood
Evelyn Attwood 01 Dec 2017

It's normal. If you plan to buy a house in one of the most beautiful spots in the country you should pay a high price.

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Evelyn Attwood
Evelyn Attwood 01 Dec 2017

I think that the situation will be the same at December.

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Scott Garnet
Scott Garnet 06 Nov 2017

If you have a patio or a porch it is important to make sure that any connecting doors are secured. Good advice for sliding glass doors is replacing the panels with storm resistant glass and getting heavier...

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richardrawlings
richardrawlings 01 Nov 2017

What has not been mentioned here is the effect of not only higher interest payments, but also that these payments are less likely to be offsettable as a business cost due to the scaling back of mortgage...

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Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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