Mortgage arrears and house repossessions continued to fall in the first six months of this year despite the high level of household debt, according to a report from the Council of Mortgage Lenders.
During this period, 4,270 properties were repossessed by mortgage lenders – 37% fewer than in the first six months of 2002, when 6,850 repossessions occurred.
The number of mortgages in arrears of more than 12 months is also down, falling 20% to 14,440 in the first six months of 2003 compared with the same period a year earlier.
But the report urged borrowers to ensure they are building enough flexibility into their household finances to cope with higher mortgage and other debt payments. It also reminded lenders to exercise prudent lending policies.
The CML figures come in the wake of a warning from the Bank of England’s chief economist, Charles Bean, that UK consumers have made themselves vulnerable to future economic downturns by increased debt levels.