Home repossessions drop to 11-year low
The number of homes being repossessed fell to an 11-year low in 2015, figures from mortgage lenders show.
A total of 10,200 repossessions were recorded across the UK in 2015 - more than halving from the 20,900 cases recorded in 2014, the Council of Mortgage Lenders (CML) said.
The 2015 annual total is the lowest since 8,200 homes were repossessed in 2004.
It means that fewer than one in every 1,000 mortgages ended in repossession in 2015, according to the CML, whose members include banks and building societies.
Fewer than one in 100 mortgages were also in arrears last year. The annual arrears rate of 0.92% was also the lowest since 2004.
The number of mortgages in the most severe arrears was also on a downward trend. By the end of 2015, 23,700 mortgages were in arrears of 10% or more of the mortgage balance, down from 24,200 at the end of 2014.
The CML urged caution on comparing the 2015 repossessions total with that for 2014, as a court case which caused some lenders to review their processes may have affected the figures.
While buy-to-let mortgages are less likely to be in arrears than home owner mortgages, they are more likely than home owner mortgages to end in a repossession.
Mortgage lenders tend to make particularly strong efforts to help home owners keep a roof over their heads.
Rock bottom interest rates and low inflation have been helping to ease some of the pressures on home owners' budgets.
Over the last year, many mortgage lenders have offered some of their lowest ever rates - and experts believe rates could stay low for some time yet.
But CML director general Paul Smee urged home owners to plan for the impact of future rate rises.
He 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."
Explaining the differences between buy-to-let and home owner mortgages, a CML spokesman said that when a home owner falls into arrears, a lender will explore a variety of options to allow them to stay in their home, depending on the circumstances.
These may include a payment holiday to help a borrower through a period of unemployment, or allowing a temporary switch from a repayment mortgage to interest-only payments.
He said that seeking a repossession "will be the last option for the lender".
The spokesman continued: "A buy-to-let loan is taken out by a landlord to invest in property, and so is fundamentally different. These borrowers may not have the same range of options. For example, many landlords only borrow on an interest-only basis at the outset, so switching them to cheaper repayments may not be an option.
"Lenders must also consider the position of tenants, who may be paying rent to a landlord who is not paying the mortgage.
"In this case, an option may be to appoint a receiver of rent to fulfil the role of the landlord, and ensure that tenants can remain in the property as long as they continue to pay the rent."
