Homeowner mortgage arrears at ‘historically low levels’

The proportion of homeowner mortgages in arrears remained at “historically low levels” in Q2 2019, figures published by UK Finance revealed.

In its latest release, the association found there were 75,890 homeowner mortgages (0.84 per cent of residential mortgages outstanding) in arrears of 2.5 per cent or more of the outstanding balance in the period – 3 per cent fewer than in the same quarter of 2018.

Within that total, 23,370 homeowner mortgages had more significant arrears, meaning they had 10 per cent or more of the outstanding balance on their mortgage, which is 2 per cent lower than 12 months ago.

However, the number of mortgaged properties taken into possession in Q2 2019 increased by 15 per cent to 1,270. Although, this figure is still well below the levels experienced between 2009 and 2014. According to UK Finance, the increase comes as a result of historic cases being processed in line with the latest regulatory requirements.

Looking at buy-to-let mortgages, there were 4,660 (0.24 per cent of all outstanding buy-to-let mortgages) in arrears of 2.5 per cent or more of the outstanding balance – 5 per cent more than in the same quarter of the previous year. Of that figure, 1,200 buy-to-let mortgages had more significant arrears, 12 per cent more than in Q2 2018.

Just under 600 buy-to-let mortgaged properties were taken into possession in the second quarter of 2019, two per cent more than in the same quarter of the previous year.

Commenting on the findings, Spicerhaart corporate sales managing director Mark Pilling said: “I don’t think this is necessarily the sign of a reversal in the trend, it is more likely, as UK Finance suggests, to be as a result of a backlog of historic cases which have been taken into possession in Q2.

“Our experience shows that lenders continue to do all they can to help borrowers in difficulty with a range of solutions to assist them deal with the difficulties faced.”

However, Pilling noted that, in some instances, repossession becomes the “most viable option and also the best customer outcome”.

“It is therefore imperative that lenders identify those who are already having difficulties managing their mortgage or are likely to in the future, as early as possible so that they can find a solution before repossession becomes the only option. We work with lenders across the UK managing their arrears and repossessions to find the best solutions for them and their customers,” he concluded.

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