In their latest quarterly survey, the Council of Mortgage Lenders reported a continue in the fall of mortgage arrears as well as the number of repossessions being made.
In their latest quarterly survey, the Council of Mortgage Lenders reported a continue in the fall of mortgage arrears as well as the number of repossessions being made.
Arrears
The survey for the 3rd quarter of 2013 shows that for arrears:
- the number of borrowers behind on their payments fell by 1.38% against the 2nd quarter of 2013 and 1.4% against 3rd quarter of 2012
- the total mortgages in arrears was 149,400, which is actually only 1.33% of the entire stock of mortgages
- mortgage stock arrears are equivalent to more than 2.5% of the mortgage balance
- arrears in the Buy-to-Let sector are lower than the home-owner sector
- BTL represents 13% of mortgages but accounts for ony 9% of the mortgages in arrears
Repossessions
The same quarterly survey shows that for repossessions:
- the rate of repossessions fell from 0.07% t 0.06% – the lowest level since CML quarterly data started in 2008
- the number of repossessions in the quarter was 7,200
- repossessions in the BTL sector are slightly higher than for home-owners at 0.10% and accounted for 1,500 of the 7,200 repossessions – i.e. 20%
Targets for the year
The CML had forecast at the beginning of the year that repossessions could hit 35,000 in 2013. Now it looks like this will be fewer than 30,000 and this will almost certainly cause the CML to revise their 2014 figure of 37,000 repossessions downwards – although the Governments mortgage rescue scheme is due to close in March 2014.
CML director general Paul Smee observes:
“The continued reduction in payment difficulties is obviously very welcome. Anyone who does face the prospect of difficulty can be reassured that repossession really is a last resort. By talking to their lender as soon as possible, most can resolve their temporary problems, without the lender resorting to repossession. It also makes sense for people to think ahead now to how they will manage their finances to cope with higher interest rates, and higher mortgage payments, as and when rates rise in the future.
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