The number of properties taken into possession by mortgage lenders declined in the second quarter of 2013, according to data from the Council of Mortgage Lenders (CML).
At 7,700, the number of possession cases was almost 4% lower than the 8,000 recorded in the first three months of the year, and was equivalent to 0.07% of all outstanding mortgages. In the first six months of the year, the number of cases of possession totalled 15,700, the lowest number since the second half of 2007, when there were 13,100 cases.
There was also a reduction in the number of mortgages in arrears in the second quarter. At the end of June, a total of 157,700 mortgages (equivalent to 1.4% of all loans) were in arrears of 2.5% or more of the balance, down from 159,700 at the end of March, and the lowest number recorded since the end of the third quarter in 2008.
Within the total number of mortgages in arrears at the end of June, 80,800 had arrears of more than 2.5% but less than 5% of the balance, 31,600 were in the range of 5-7.5% of the balance, 15,000 at between 7.5-10% of the balance, and 30,300 with arrears of 10% or more of the balance.
The CML’s most recent forecast for 2013 is that there will be 35,000 cases of possession during the year, with 160,000 mortgages ending the year in arrears of more than 2.5% of the balance. At this stage, the CML has no imminent plans to revise the forecast.
Jackie Bennett, the CML’s head of policy, said: “Given the pressures on household incomes, the continuing modest decline in arrears and possessions is welcome. Low interest rates and lower than expected unemployment are providing some relief for households, and borrowers are continuing to prioritise mortgage payments while lenders are showing forbearance where it is viable.
“Yesterday’s message from the Bank of England provides some encouragement to those borrowers who are struggling that any rise from the current historically low Bank rate will be linked to an improvement in the wider economy. As ever, the key message for those borrowers is that they should talk to their lender as soon as possible if they believe they are in danger of missing a mortgage payment.
“Lenders want to keep people in their homes where possible, and most problems can only be contained if the borrower and lender work together at the earliest opportunity on a solution tailored to the borrower’s circumstances.”