The CML found the level of mortgage payment difficulties showed little change in the first quarter, with repossessions making up 0.08% of the 11.3m first-charge mortgages in the UK.
While repossessions were up 15% on Q4’s total of 7,900, the CML noted the fourth quarter of the year typically sees a lower number and Q1 was equal to the average quarterly number of repossessions throughout 2010.
Arrears across all but the deepest bands fell back in the first three months of the year. The number of arrears of 2.5% or more of the outstanding balance fell just under 2% to 166,900, 1.47% of all loans, compared to 170,000, 1.5% of all loans, at the end of December 2010.
This was an 11% improvement in arrears on 187,300 (1.65% of loans) recorded a year earlier, with Q1 recording the lowest share of mortgages in arrears since the third quarter of 2008.
The only arrears band to worsen was where arrears were above 10% of the mortgage balance, increasing slightly from 27,400 at the end of 2010 to 27,700 at the end of March.
Nevertheless, the proportion of all loans was unchanged at 0.24%.
The CML forecast remained unchanged at 40,000 repossessions and 180,000 arrears cases of 2.5% or more at end-year.
It said that low interest rates should limit the impact of making mortgage repayments, despite the increased burden of rising tax and inflation.
However, the CML said that the FSA’s emphasis on prudential issues and its concerns that “excessive” forbearance are storing up future problems, need to be balanced against the objective of minimising repossessions for both social and market related reasons.
Michael Coogan, director general of the CML, said: “In essence, good arrears management practice is a balance between giving households every chance to rehabilitate and get back on track, and limiting the damage in the minority of cases where this is not going to be achievable.
“Looking ahead, the financial position of many households is likely to be stretched for some while, and some will inevitably find themselves in difficulty. Lenders have a range of options to nurse borrowers through temporary problems, but will clearly need to be mindful of the regulator’s concern that too much forbearance may be as bad as too little.”
