The number of mortgages in arrears and repossessions hit record lows in the second quarter of this year, figures show. Data from UK Finance reveals th
The number of mortgages in arrears and repossessions hit record lows in the second quarter of this year, figures show.
Data from UK Finance reveals the number of mortgages in arrears of 2.5% or more of the outstanding balance declined to 88,200, the lowest level since at least 1994 when records of the number began.
The total was also 5% lower than in the first quarter.
There was also a drop in the number of mortgages across all arrears bands, including those with the highest levels of arrears.
In the same period, the number of mortgages with arrears of 10% or more of the outstanding balance totalled 25,200, down 5% from 26,500 in the preceding quarter, ending a period of five successive quarters in which this figure had edged upwards.
Meanwhile, the number of properties taken into possession also declined from 1,900 to 1,800, the lowest figure since quarterly data was first published in 2008.
Paul Smee, head of mortgages for UK Finance, said: “These figures show that the overwhelming majority of borrowers are managing their mortgage payments successfully, and many of those who have experienced some difficulty in the past are able to recover their financial position. The recent improvement in the number of mortgages with high levels of arrears is particularly welcome.
“Borrowers are being helped by low interest rates, but mortgage costs are certain to rise at some stage. It is important therefore for customers to plan ahead and consider how their finances would be affected in those circumstances. As ever, lenders will continue to help borrowers resolve any financial difficulty if possible, so customers should not hesitate to contact their lender if they anticipate any payment problems.”
However, Mark Pilling, managing director at Spicerhaart Corporate Sales, was more cautious about the numbers.
He said: “What the headlines don’t show is the regional differences. Although there were no repossessions recorded in 93 local authorities, the further north we go the more repossessions we see.
“The percentage as a whole is falling, but it is in the areas where house prices, and therefore mortgage lending, is lowest that there are more repossessions, highlighting again the north/south divide when it comes to wages and affordability.
“This is a trend that we have seen for a while, and one that has no easy fix while uncertainty remains and real wages continue to fall as inflation rises.
“It will be interesting to see what happens in the coming months as the Bank of England struggles to keep a lid on inflation during Brexit negotiations.”