Mortgage repossessions fall by further 25%: CML

The number of properties taken into possession last year declined by almost 25% to its lowest number since 1982, according to new data from the Council of Mortgage Lenders.

Related topics:  Mortgages
Rozi Jones
9th February 2017
house sale buyer mortgage arrears
"It is encouraging to see another improvement in arrears and possessions during a year in which borrowers were clearly helped by the downward trend in mortgage rates."

2016 saw a total of 7,700 cases of possession compared with 10,200 in 2015. Over the course of 2016, the number of mortgages in arrears also fell by 7%.

However the CML says that despite the data showing a clear underlying downward trend, "some care is needed in making annual comparisons" as the timing of some possessions last year may have been affected by a court case that caused lenders to review their processes.

The research found that across the market as a whole, there was "significant improvement last year" in the number of mortgages with more modest levels of arrears (up to 5% of the outstanding balance).

There was, however, an increase over 2016 in the number of mortgages with arrears of more than 10% of the balance, from 23,700 to 26,000, but this figure may also have been distorted by the timing of possession actions.

In the buy-to-let sector, the number of mortgages in arrears and the number of properties taken into possession were both unchanged in Q4 but were lower than at the end of 2015.

CML director general, Paul Smee, commented: "It is encouraging to see another improvement in arrears and possessions during a year in which borrowers were clearly helped by the downward trend in mortgage rates. But customers do need to be ready for a time when the outlook may not be so benign, with pressure on real incomes increasing and as interest rates begin to move upwards again. As ever, borrowers who fear they may miss a payment should speak to their lender. Lenders remain committed to helping borrowers work through any period of temporary payment difficulty and remain in their home wherever possible."

Separate reserch from the Finance & Leasing Association shows that second-charge mortgage repossessions fell by almost 37% in 2016. However in Q4 the number of repossessions was 39, up by 18% compared with the same quarter in 2015.

The rate of second-charge mortgage repossessions, as a percentage of average outstanding agreements, has fallen from 0.34% in 2009 to just 0.07% in 2016.

Fiona Hoyle, Head of Consumer and Mortgage Finance at the FLA, said: “Supporting customers in financial difficulty remains a priority for the second charge mortgage market. This is reflected in the low number of repossessions reported in 2016.  

“We expect the number of second charge mortgage repossessions in 2017 to be at a similar level to 2016.”

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