According to the latest report from CML, repossessions in Q1 this year fell to 2,100 (1,500 home-owner, 600 buy-to-let), meaning that the repossession rate is the lowest on record. If this rate continued through 2016, it would put the annual number of repossessions at 8,400, lower than any year since 1982 (but in 1982 there were only 6.9 million mortgages, against 11.1 million mortgages today). Mortgage arrears also continued to fall. For the first time in more than a decade, the number of mortgages in arrears of 2.5% or more fell below the 100,000 mark, with 96,200 loans in arrears at the end of March, down from 101,700 at the end of December, and 111,200 at the end of the first quarter of 2015. Even the number of mortgages in the most serious arrears band of 10% or more, which has remained fairly static while the lower arrears bands have declined, fell a little this quarter. It has been a notable trend in recent years that the decline in mortgage arrears and repossessions means that experience is much more positive than in the rented sector, where separate data from the Ministry of Justice, based on court activity, shows that eviction rates are much higher (especially in the social rented sector). For example, there were 42,728 rental evictions in England and Wales by county court bailiffs in 2015, against 5,594 mortgaged property repossessions by county court bailiffs, even though the rented sector accounts for only around a third of the housing stock. Looking in more detail at the latest CML data, it is possible to look at experience in both the home-owner mortgage market and the buy-to-let market. As usual, arrears rates are higher among home-owners than buy-to-let landlords, but the repossession rate is lower. This is because lenders will seek to avoid repossession wherever possible to enable home-owners to get over temporary periods of difficulty, whereas buy-to-let is a more commercial enterprise and lenders may move to protect their position more quickly on rental properties as tenants move out. Paul Smee, CML director general, had this to say: “We cannot completely avoid the risk of any individual household experiencing arrears or repossession. But lenders continue to work very effectively to help their borrowers through periods of difficulty when they do occur, and borrowers should be reassured that most cases of arrears can be resolved and will not lead to repossession. The key to dealing with difficulty is to tackle it early, and to communicate with your lender as soon as you think you may be facing problems.” Source link