Repossessions have fallen by 17% when compared to this time last year, according to new data published by the Council of Mortgage Lenders (CML).
The repossession rate remained at 0.07% for the first quarter of 2013, meaning that approximately 1 in 1,400 mortgaged properties were repossessed.
The CML data also shows the numbers of mortgages in arrears has remained unchanged for almost a year. At the end of the first quarter, 159,800 mortgages were in arrears of at least 2.5% of the outstanding balance. This equates to 1.4% of all mortgages being in arrears; the same amount as in the previous three months and the same as the first quarter of 2012.
Furthermore, around 82,600 mortgages were in arrears by between 2.5% and 5%, whilst 32,000 troubled borrowers were behind with their payments by between 5% and 7.5%. Meanwhile, almost 15,000 mortgages had arrears of between 7.5% and 10% and 30,300 had missed payments equalling more than 10% of their mortgage balance.
In the first three months of 2013, over 8,000 properties were repossessed by lenders. Although this figure is down from 9,600 in the first quarter of 2012, it represents a slight rise on the final three months of last year. This rise though follows seasonal trends and was not unexpected.
Interestingly, 20% of repossessions in the first quarter of 2013 were on buy-to-let properties, instead of owner-occupied homes.
Currently, the CML has revealed they have no plans to rethink their forecast for 35,000 repossessions this year.
CML Director General, Paul Smee, said: “Mortgage arrears and repossessions have stabilised at levels lower than many anticipated when the economic downturn started. Low interest rates, continuing employment, lender forbearance and tactical public policy support have combined to ensure that repossession really is a last resort.”
Smee continued: “Anyone who is worried about their mortgage can be assured that, as long as they take steps early to address them, most problems can be contained. Lenders very much want to enable people to stay in their homes wherever they have sustainable prospects of getting their mortgage back on track.”
Experts are urging troubled borrowers, who may be struggling to pay their mortgage, to contact their lender and immediately attempt to repair the problem. If the problem of arrears is left unsolved, the lender could choose to repossess the property, which would negatively affect borrower’s credit score and will affect their chances of getting finance in the future.