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Arrears and repossessions fall to all-time low – UK Finance

  • 09/08/2018
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Arrears and repossessions fall to all-time low – UK Finance
Mortgage arrears and property possessions continued to fall in the second quarter of 2018 hitting new record lows, according to UK Finance.


Data from the trade body showed that out of more than 9m residential mortgages, just 76,740 were in arrears of 2.5% or more – 8% fewer than at the same point last year.

This was echoed in the buy-to-let market where just 4,400 mortgages had arrears of 2.5% or more from a total book of 1.9 million, down 6% from Q2 2017.

The number of residential and buy-to-let mortgages in arrears fell by at least 4% at all levels, aside from buy-to-let loans with more than 10% arrears, which grew by 2% to total 1,080.

Repossessions also fell notably between April and June compared to the previous year.

There were 1,060 homeowner mortgaged properties taken into possession in the second quarter of 2018, 5% fewer than the same period last year. While buy-to-let possessions fell 24% to 520.


Potential for arrears increase

UK Finance director of mortgages Jackie Bennett has previously warned that arrears and possessions were likely to rise over the coming year following base rate rises and the changes in Support for Mortgage Interest (SMI).

Bennett welcomed the continued fall in these measures but reiterated her warning.

“Arrears and possessions are at an all-time historic low since we first started collecting this data over 24 years ago,” she said.

“While this is positive, last week’s base rate rise coupled with the disappointing uptake of the Support for Mortgage Interest (SMI) loan could see arrears creeping up in the coming months.

“With well over 90% of new loans taken out at fixed rates, most recent borrowers will see no immediate impact from the bank rate increase,” she added.

The trade body noted that anyone with concerns about managing their mortgage should contact their lender to discuss the advice and support available and that repossession was always a last resort.


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