Marketing No Comments

Arrears and repossessions fall to an all-time low, say lenders

Arrears and repossessions are at an all-time low since the data began to be collected 24 years ago.

Trade body UK Finance reports that in the second quarter of this year, there were 1,060 home owner properties taken into possession – 5% fewer than in the same quarter last year.

There were also 520 buy-to-let properties taken into possession, 24% down on the same period a year ago.

There were 76,740 home-owner mortgages in arrears of 2.5% of more, 8% down on a year ago.

Within that total, 23,190 home owner mortgages were 10% or more in arrears, 4% down.

There were 4,440 buy-to-let mortgages in arrears of 2.5% or more  in the second quarter of 2018, 6% fewer than in the same quarter of the previous year.

Within that total, there were 1,080 buy-to-let mortgages with arrears representing 10% or more of the outstanding balance. This was 2% greater than in the same quarter of the previous year – the only category which rose.

The Ministry of Justice has also released new possession statistics, covering the period April to June.

It says the compared with the same quarter last year, mortgage possession claims, orders, warrants and repossessions by county court bailiffs fell 14%, 14%, 18% and 11% respectively.

Mortgage possession claims fell from a peak of 26,419 in April to June 2009 before stabilising between April and June 2015, when there were 4,849.

In April to June this year, there were 4,453 claims for possession.

There were 952 repossessions by county court bailiffs.

Mark Pilling, Spicerhaart corporate sales managing director, said: “As much as arrears remain historically low, there is the danger that anyone on a tracker or SVR mortgage would be looking at affordability now that interest rates have increased.

“The Governor of the Bank of England has already suggested that this will not be the last rate rise this year, which is likely to put more pressure on some people.

“UK Finance recently announced that lenders have signed up to agree common standards, which will help existing borrowers on reversion rates who, because of stricter affordability criteria, are ineligible to move to an alternative product.

“However, there are currently over 150,000 mortgage prisoners, but these proposals will only help 10,000 people initially, which is a drop in the ocean.  For the other 140,000 there is a real threat that, as wages stagnate and they remain on high interest rates, they will fall into arrears.

“Although it is good that some progress has been made, it is important for lenders, and mortgage owners, to now be looking at all the cases on their books and finding ways to help their clients out of this situation.”

Source: Property Industry Eye