The Council of Mortgage Lenders (CML) has revealed that the number of repossessions in the first quarter of 2016 was 2,100 (1,500 home-owner, 600 buy-to-let), meaning that the repossession rate is the lowest on record.
The trade body said that if this rate continued through 2016, it would put the annual number of repossessions at 8,400, lower than any year since 1982 (but in 1982 there were only 6.9 million mortgages, against 11.1 million mortgages today).
Mortgage arrears also continued to fall. For the first time in more than a decade, the number of mortgages in arrears of 2.5% or more fell below the 100,000 mark, with 96,200 loans in arrears at the end of March, down from 101,700 at the end of December, and 111,200 at the end of the first quarter of 2015. Even the number of mortgages in the most serious arrears band of 10% or more, which has remained fairly static while the lower arrears bands have declined, fell a little this quarter.
Arrears rates are higher among home-owners than buy-to-let landlords, but the repossession rate is lower. The CML said this is because lenders will seek to avoid repossession wherever possible to enable home-owners to get over temporary periods of difficulty, whereas buy-to-let is a more commercial enterprise and lenders may move to protect their position more quickly on rental properties as tenants move out.
Paul Smee, CML director general, said: “We cannot completely avoid the risk of any individual household experiencing arrears or repossession. But lenders continue to work very effectively to help their borrowers through periods of difficulty when they do occur, and borrowers should be reassured that most cases of arrears can be resolved and will not lead to repossession.
“The key to dealing with difficulty is to tackle it early, and to communicate with your lender as soon as you think you may be facing problems.”
