Competitive mortgage rates mean repossessions are reducing

February 14, 2015 by Brendan

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It has been revealed by the Council of Mortgage Lenders (CML) that 2014 saw the lowest number of property repossessions since 2006.

When combined with the news that fewer people were reported as being in arrears with their mortgage payments, it is a clear reflection of the continued all time low rates that are being offered to borrowers.

It seems that lower rates, which are a result of the Bank of England remaining at 0.5 per cent for a number of years, have acted like an air bag in cushioning borrowers from getting into financial difficulty.

While this is good news, it has prompted some analysts to announce that as many people are currently budgeting to the maximum of their income, leaving no disposal funds, they may struggle when the rate increases begin later this year or early next year.

Paul Smee of the CML confirmed this and commented:

“No-one should be lulled into a false sense of security that the current low interest rates we are experiencing will last forever, though.”

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