Home repossessions set to hit lowest number since 1982
The number of homes being repossessed is on course to reach its lowest level since 1982, mortgage lenders have said.
During the first half of 2016, 4,000 properties were repossessed, according to the Council of Mortgage Lenders (CML).
There was a decline in owner-occupier and buy-to-let repossessions in the second quarter compared with the first quarter, with 2,100 cases in the first quarter and 1,900 in the second.
The number of mortgages in arrears is also at its lowest level since records started more than 20 years ago.
At the end of June, there were 92,500 mortgages in arrears of at least 2.5% of the balance, down from 95,900 at the end of March. The number was 13% lower than a year ago and the lowest since these records started in 1994.
Despite the downward trend, there was an upswing in the number of loans in the worst arrears band - those owing more than 10% of the balance.
The number in this category edged up from 23,500 three months earlier to 23,700 - matching the number at the end of last year.
The CML's report said: "If the present trend continues, the number of mortgaged property repossessions this year is on course to be the lowest since 1982."
Some 6,900 properties were repossessed in 1982, but at that time there were just over half the number of mortgages, at 6.5 million compared with 11.1 million now.
Last week's snip to the Bank of England base rate to 0.25% will mean many home owners see their mortgage repayments get cheaper, helping to keep costs relatively affordable. As well as passing on the rate cut to borrowers on bank rate tracker mortgages, many lenders have announced rate cuts for borrowers on standard variable rate (SVR) deals.
CML director general Paul Smee said: "Another welcome reduction in arrears and possessions shows that borrowers are continuing to prioritise their mortgage commitments and that lenders remain committed to helping them through a period of temporary difficulty, wherever possible.
"As ever, the key to success in dealing with any payment problems is to address them as soon as possible. Any borrowers anticipating difficulty in paying their mortgage should therefore speak to their lender at the earliest opportunity."
Jonathan Harris, director of mortgage broker Anderson Harris, said that while the decline in the number of mortgages in arrears is excellent news, there is "no room for complacency".
He said: "There are still many home owners being repossessed or finding themselves in arrears on their mortgage each year, which begs the question: what will happen when interest rates move the other way and start to rise? How will people cope?
"We suspect that when it comes to their finances there are many people teetering on a knife edge and rate rises could easily push them over.
"While it looks highly unlikely that interest rates will rise any time soon, borrowers should still plan ahead and consider how they would cope with higher mortgage rates. For those who would struggle to pay their mortgage were interest rates to rise, a fixed rate makes a lot of sense, and there are some incredibly cheap deals available."