New CML data has found that a decline in arrears and repossessions has continued in the third quarter of 2015. The quarterly repossession and arrears rates are once again at their lowest levels since the CML's quarterly records began.
There were 2,500 properties taken into possession in the third quarter, the same number as in the second quarter, and 50% down on the 5,000 reported in the third quarter of 2014, although caution is needed in making comparisons.
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. The number of loans in all arrears bands was down apart from the most serious band of 10% or more, where the number was slightly up from 23,300 last quarter to 23,700 this quarter but still nearly 7% lower than the 25,400 at the end of September last year.
This is the second quarter in which the CML is able to publish fully consistent data on arrears and possessions across both the owner-occupier and the buy-to-let markets. Of all loans with arrears of more than 2.5% of balance, 99,000 were owner-occupier (down from 100,700 last quarter), and 5,700 buy-to-let.
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.”