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Mortgage arrears at historic lows – UK Finance

  • 08/11/2018
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Mortgage arrears at historic lows – UK Finance
Mortgage arrears remained at historic lows in the third quarter of 2018 standing at 77,600, data have shown.


The number of homeowner mortgages in arrears of 2.5% or more of the outstanding balance fell by 5% in the third quarter of 2018, compared to the same period last year, according to the latest figures released by UK Finance.

Within the total, homeowner mortgages with more significant arrears remained unchanged at 24,090 in Q3 2018 from the same quarter of the previous year, representing 10% or more of the outstanding balance.

The number of buy-to-let mortgages in arrears of 2.5% or more of the outstanding balance fell by 1% in Q3 2018 from the same quarter of the previous year, standing at 4,660.

Within the total, there were 1,150 buy-to-let mortgages with more significant arrears, representing 10% or more of the outstanding balance. This was 3% higher than in the same quarter of the previous year.

Mortgaged properties taken into possession in Q3 2018 decreased by 19% at 1,080 from the same quarter in 2017, whilst the BTL mortgaged properties taken into possession fell by 17% at 500 in Q3 2018, compared to the same quarter last year.

Jackie Bennett, director of mortgages at UK Finance (pictured), said that it is encouraging that homeowner arrears and repossessions remain at historically low levels, which shows the vast majority of borrowers continue to repay their mortgages in full and on time each month.


Possessions may be declining

Jonathan Harris, director of mortgage broker Anderson Harris, said that possessions may be declining but that can change and borrowers need to be prepared.

He added: “We suspect that when it comes to their finances there are many people who don’t have a buffer to tide them over should they get into difficulty.

“While interest rates remain low, despite two rate hikes in the past year, they could rise further. Borrowers must plan ahead and consider how they will cope if this happens. Fixed-rate mortgages give certainty and help with budgeting, while remaining competitively priced.

“It is also vital that borrowers keep their lender in the loop if they are struggling to pay their mortgage. Lenders are being flexible and showing forbearance but it is much easier and less stressful to come up with solutions early on than further down the line when options may be much more limited.”

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