Mortgages in arrears hits lowest level since 2008
Published: 28 August 2013 | Author: Bernard Clarke
Arrears on mortgages have hit their lowest levels since 2008, our figures have shown. The proportion of mortgages three months in arrears stood at 1.85% at the end of June this year, the lowest level since the first half of 2008, when it was 1.3%.
Mortgages in long-term arrears of over 12 months accounted for 0.4% of the total, down from a high of 0.6% in the second half of 2009. Loans in arrears of between three and six months, and six to 12 months, were also both down to 2008 levels, at 0.85% and 0.61% respectively.
Our data also showed that possession cases in the first six months of 2013 totalled 15,700, the lowest number since the second half of 2007, when there were 13,100 cases. Our current forecast is that 160,000 mortgages will end the year in arrears of more than 2.5% of the balance, again a return to 2008 levels. At this stage, the CML has no plans to revise the forecast.
The CML welcomes the recent figures showing that economic recovery is continuing and that lenders and borrowers are engaging to find workable solutions in cases of mortgage arrears. As ever, early communication with lenders when borrowers are in danger of missing a mortgage payment is crucial in helping find a solution tailored to the borrower’s individual circumstances.
With the news that the mortgage rescue scheme will be closed to applications next spring, home-owners in future will have less state support in dealing with cases of arrears. That reinforces the need for early engagement with the lender for those borrowers who believe they are at risk of falling behind with their payments.
Lenders have already made a considerable commitment in extending forbearance to those in arrears, which has contributed to the steady decline in cases of possession.