Lowest level of mortgage arrears in 10 years
February 15, 2016 by Brendan O'Neill
Home owners
Mortgage arrears and repossessions are at the lowest rate in over a decade, thought to be due to a recovering economy and lower interest rates.
According to the Council of Mortgage Lenders (CML), 0.92% of mortgages in the UK were in arrears in 2015, the lowest figure since 2004 when just 0.91% of borrowers were in a similar situation. In 2015, 10,200 people had to turn over the keys to their properties, which was a 50% reduction on the figure of 2014. The Ministry of Justice released data that indicated 4,349 repossessions had been recorded in the courts during the final three months of 2015, a 45% reduction on the same period during 2014.
CML’s director general, Paul Smee, agreed that the number of mortgage arrears and repossessions falling was good news, but issued a warning to home owners:
“We would continue to urge all borrowers to plan ahead for a time when the interest rate environment may be less benevolent. Lenders do not wish to see borrowers who are coping currently falling into difficulty if and when rates do eventually rise.”
The Bank of England intended to increase its base rates last year, but decided to hold off until the right time. Policymakers were forced to consider other concerns before increasing interest rates, which includes the economic slowdown in China.
The regulations for current lending have been tightened, with affordability checks being carried out. Mortgage advisers are fully trained with a CeMAP qualification, to ensure they are equipped with the knowledge to help borrowers.
Written by
Brendan O'Neill
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