Mortgage possessions down by almost 25 per cent, helped by low mortgage rates, says CML

Mortgage possessions were down in the fourth quarter of 2016, with the number of properties taken into possession declining by almost 25% last year, new data reveals.

According to data from the Council of Mortgage Lenders (CML), there were 7,700 cases of possession last year, compared with 10,200 in 2015, making it the lowest figure since 1982. The number of mortgage arrears was also down, falling by 7% over the course of 2016.

However, the report from the CML stated that while the data shows a clear underlying downward trend in the number of possessions, “some care is needed in making annual comparisons. The timing of some possessions last year may have been affected by a court case that caused lenders to review their processes.”

CML data shows that the number of possession cases not only fell in the fourth quarter of 2016, but over the year as a whole.

The last quarter of 2016 saw 1,800 properties taken into possession, down on the 1,900 recorded in the third quarter and 2,200 in the final quarter of 2015.

As for mortgage arrears, 94,100 mortgages were in arrears of 2.5% or more of the outstanding balance, at the end of last year.

This was a slight increase on the total of 93,300 recorded at the end of Q3. Mortgage arrears were down however, when compared to the total of 101,700 at the end of 2015.

Notable improvement can be seen across the market when reviewing the number of mortgages with more modest levels of arrears (up to 5% of the outstanding balance).

But the CML found that there was a rise in the number of mortgages with arrears of more than 10% of the balance in 2016, from 23,700 to 26,000. In its report the Council says that this figure may also have been distorted by the timing of possession actions.

As for buy to let mortgage arrears, the figures were unchanged in the fourth quarter of 2016, at 5,000, but came in 11% lower than at the end of 2015 (5,600). Owner-occupied mortgage arrears rose slightly in Q4 2016 from 88,300 to 89,200, but came in below 2015’s total (96,200).

Buy to let property possessions were also unchanged in the final quarter of last year at 600, but were lower than in the last three months of 2015, when 700 were recorded.

The number of buy to let property possessions in the last quarter of 2016 (1,200) were also lower than the 1,300 recorded in the preceding quarter and the 1,500 in the last quarter of 2015.

Paul Smee, director general of the CML, said:

“It is encouraging to see another improvement in arrears and possessions during a year in which borrowers were clearly helped by the downward trend in mortgage rates. But customers do need to be ready for a time when the outlook may not be so benign, with pressure on real incomes increasing and as interest rates begin to move upwards again.

As ever, borrowers who fear they may miss a payment should speak to their lender. Lenders remain committed to helping borrowers work through any period of temporary payment difficulty and remain in their home wherever possible.”

 

You may be interested in:

Complex Buy to Let Index

BTL Product Index

BTL Limited Company Index

Residential Stamp Duty Calculator

Mortgage Repayment Calculator

 

 

Author