Mortgage arrears are now at their lowest levels for the last 23 years, according to lenders.
A recent report compiled by UK Finance has revealed that the number of mortgages which have arrears of 2.5% of the outstanding loan or more, has fallen to 88,200 during the second three months of 2017. This is the lowest number since the records were first collected in 1994. This figure was 5% lower than the year’s first quarter, and equates to just 0.8% of the UK’s 11 million mortgages.
However, UK Finance issued a warning that while the low interest rates are currently helping some homeowners, the cost of mortgages is “certain to rise at some stage”. The number of repossessions also fell during the second quarter, falling to 1,800, which is the joint lowest figure since 2008, when data was first collected on a quarterly basis. Arrears in the buy-to-let sector were lower than those in the owner occupied, although repossessions were higher in the buy-to-let sector of the market.
UK Finance also stated that lenders will help owner occupiers to remain in their homes where possible. Paul Smee, the head of mortgages at UK Finance, said that the figures demonstrated that most borrowers successfully manage their mortgage, and many who experience difficulty are able to turn their situation around.
For borrowers who are struggling, it may be a case of moving to a fixed rate deal to save money. Mortgage advisors spend time on CeMAP courses so that they can offer advice, which will include approaching the lender.
