Repossession at its lowest since 2006
The amount of households having their homes repossessed has decreased to its lowest level since 2006, as reported by mortgage lenders.
The Council of Mortgage Lenders (CML) have just released figures showing that 11,800 properties were taken into possession in the first half of this year. This marks the lowest number since 2006.
Low interest rates have helped, keeping people’s repayments affordable. The CML have said that although the figures are “clearly welcome” it is now important that borrowers start to plan as the economy improves and therefore sending the interest rates up.
CML director general Paul Smee said the figures show how borrowers, lenders and money advisers are working well together to contain payment problems. He continued: “But rates will rise at some stage, of course, and borrowers should be planning for that now. Although the Bank of England insists they will be increased in a series of ‘baby steps.”.
However, the CML believe that “given a favourable jobs market, it seems reasonable to think that the majority of households will cope well with initial gentle rate rises”. It is predicted that about 25,000 repossessions will take place this year, which would mark a fall from 28,900 last year and is also down from its previous forecast at the end of last year of 28,000 repossessions in 2014.
The CML’s figures also show that the number of mortgages in arrears of 2.5% or more of the balance stood at 131,400 at the end of June, a total which is the lowest seen since the first quarter of 2008 and represents 1.18% of all mortgages. Stricter mortgage lending rules came into force at the end of April under the Mortgage Market Review (MMR), which could be behind the decrease in money owed.
Housing Minister Brandon Lewis said: “These figures show how our work to tackle the deficit and keep interest rates low is helping more families to stay in their hard-earned homes.”