Repossessions at the lowest they have been for a decade

According to the Council of Mortgage Lenders fewer than one in 1,000 mortgages ended in repossession in 2015. And, with fewer than 1 in 100 mortgages in any sort of arrears, at 0.92% the annual arrears rate is also at its lowest for more than a decade.

At 10,200, the total number of repossessions in 2015 was less than half the number in 2014 – down from 20,900. Caution is needed on the year-on-year comparison, because the timing of some possessions may have been affected by the aftermath of a court case which has been causing lenders to review their processes. However, it is likely that the underlying trend is still emphatically down.

CML economics

Beneath the headline figures, the CML quarterly data shows home-owner mortgage arrears running at 1.03% of all loans at the end of 2015, with buy-to-let at a lower rate of 0.31%, continuing the recent trend of a lower prevalence of arrears in the buy-to-let market.

The Council of Mortgage Lenders quarterly data clearly show repossessions are down, with around 1 repossession per 2,500 mortgages in the buy-to-let market in the fourth quarter of the year, compared with 1 in 5,000 in the home-owner market.

The number of mortgages in the most severe arrears was also showing signs of decreasing. By the end of 2015, 23,700 mortgages were in arrears of 10% or more of the mortgage balance, down from 24,200 at the end of 2014.

Source: CML economics

Commenting on the latest data, Council of Mortgage Lenders director general Paul Smee said:

Of course it is good news that the levels of mortgage arrears and repossessions remain low and falling. But, at the risk of sounding as if we are crying wolf, we would continue to urge all borrowers to plan ahead for a time when the interest rate environment may be less benevolent. Lenders do not wish to see borrowers who  are coping currently  falling into difficulty if and when rates do eventually rise.

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