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Mortgage repossessions fall to lowest level since 2007

Joanna Faith
Written By:
Joanna Faith
Posted:
Updated:
13/02/2014

Mortgage repossessions fell to their lowest level since 2007 last year, according to data from the Council of Mortgage Lenders (CML).

At 28,900, the number of repossessions represented 0.26% of outstanding mortgages – also the lowest proportion in seven years.

This compares with 33,900 repossessions and a rate of 0.30% in 2012.

Repossessions have been falling steadily since their most recent peak in 2009 of 48,900 (0.43%), due to low interest rates, relatively strong employment, and effective arrears management.

Mortgage arrears have also declined. At the end of 2013, 1.29% of all mortgages were in arrears to the value of at least 2.5% of the loan balance – that is at least £2,500 arrears on a £100,000 loan.

This compares with 1.40% of mortgages at the end of 2012, and a peak of 1.88% in the second quarter of 2009.

At the end of 2013, 28,700 mortgages (0.26% of all mortgages) were 10% or more in arrears, down from 29,200 at the end of the previous quarter and 28,900 at the end of 2012.

CML director general Paul Smee said: “Mortgage arrears and repossessions continue to fall, with low interest rates, relatively strong employment, and lender practices all combining to keep most people in their homes even if problems arise.

“Lenders recognise that temporary changes to circumstances can knock households off track – we only need to look at the experiences of households affected by flooding right now to realise that life can contain unpleasant and unforeseen shocks.

“Anyone facing difficulty should talk to their lender, who will try to work with them towards a plan that will get them back on track so that they can sustain their home-ownership for the long term.”