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Lowest arrears rate for more than a decade in 2015

Published: 11 February 2016

Fewer than one in 1,000 mortgages ended in repossession in 2015, according to the latest update from the Council of Mortgage Lenders. And, with fewer than 1 in 100 mortgages in any sort of arrears, at 0.92% the annual arrears rate is also at its lowest for more than a decade.

Beneath the headline figures, the CML quarterly data shows home-owner mortgage arrears running at 1.03% of all loans at the end of 2015, with buy-to-let at a lower rate of 0.31%, continuing the recent trend of a lower prevalence of arrears in the buy-to-let market.

However, the picture is reversed on repossessions, with around 1 repossession per 2,500 mortgages in the buy-to-let market in the fourth quarter of the year, compared with 1 in 5,000 in the home-owner market.

Chart 1: Arrears on mortgages, 2.5% or more of balance outstanding

Chart showing arrears by bands as a proportion of total arrears 2.5% or more of balance outstanding

Source: CML economics

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Across the whole market, most had relatively modest levels of arrears (under 5% of the mortgage balance). The number of loans with arrears in the most severe band, representing 10% or more of the mortgage balance, was 23,700 - down from 24,200 at the end of 2014. The modest decline in the most serious arrears band may partly reflect distortions in the timing of possessions, but the overall arrears trend is clearly down.

Chart 2: Arrears by bands as a proportion of total arrears 2.5% or more of balance outstanding

Chart showing arrears by bands as a proportion of total arrears 2.5% or more of balance outstanding

Source: CML economics

Download the data


At 10,200, the total number of repossessions in 2015 was less than half the number in 2014 - down from 20,900. Caution is needed on the year-on-year comparison, because the timing of some possessions may have been affected by the aftermath of a court case which has been causing lenders to review their processes. However, it is likely that the underlying trend is still emphatically down.

Chart 3: Repossessions, buy-to-let and owner-occupied markets

 20160211 A&P Q4 2015 chart 3

Source: CML economics

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Commenting on the latest data, CML director general Paul Smee said:

Of course it is good news that the levels of mortgage arrears and repossessions remain low and falling. But, at the risk of sounding as if we are crying wolf, we would continue to urge all borrowers to plan ahead for a time when the interest rate environment may be less benevolent. Lenders do not wish to see borrowers who are coping currently falling into difficulty if and when rates do eventually rise.


Notes to editors

1. The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 95% of all residential mortgage lending in the UK. There are 11.1 million mortgages in the UK, with loans worth over £1.3 trillion.

2. In Q2 2015 we changed the methodology used to compile CML arrears and possessions data, to improve the quality of the results.

Previously, we were using two separate surveys to produce the arrears and possessions dataset (and the number of mortgages outstanding). Over the past year we have successfully introduced a new single data return covering both owner-occupier and buy-to-let arrears and possessions. Lenders representing 94% of the market now contribute, and we gross up for the remainder of the market.

We are now publishing the arrears and possessions figures based on the new survey (including data Q2 2014-Q1 2015 that were previously published on the basis of the old methodology). This means that there is a break in the data series between Q1 2014 and Q2 2014, but figures are directly comparable back to Q2 2014.

3. The current underlying trend for repossessions is one of continuing gentle downward movement. For technical reasons relating to lenders' processes, the number of repossessions in 2015 shows an overstated reduction. This is expected to unwind progressively in 2016. Subsequent quarters will therefore show a compensating effect. Arrears numbers are unaffected.

4. CML arrears and repossessions figures are for the UK as a whole. No breakdown of data is available for the regions or for individual countries within the UK.

5. The Ministry of Justice's mortgage and landlord repossession statistics for the same period can be found on the website. This includes Quarterly National Statistics on repossession claim actions in county courts by mortgage lenders and social and private landlords.

6. CML arrears and repossessions data for the first quarter of 2016 will be published on Thursday 12 May 2016.

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