Overall, the repossessions landscape appears stable for the time being.
Through the first quarter of the year, there was a modest improvement in the total number of mortgages in arrears. The number of mortgages with arrears of 2.5% or more of the outstanding balance fell to 157,800 (1.4% of all loans), down from 160,300 at the end of December 2011 and 170,500 at the end of the first quarter of 2011.
Within the total number of arrears cases, the largest improvements were in the middle arrears bands. Year on year, the number of loans in the 5-7.5% arrears band fell by 12%, and reached its lowest number since the fourth quarter of 2008, while the number in the 7.5-10% band fell by 13% to its lowest since the third quarter of 2008. The only arrears band to show a year-on-year increase was the group of loans with arrears of 10% and over, with the 28,000 loans in this category, 300 higher than a year earlier, representing the highest number since June 2000.
The 45,000 central forecast for repossessions in 2012 may be revised down when the CML publishes revised housing market forecasts later in the summer. However, continuing pressures on household finances, changes to welfare benefits, and an upward drift in mortgage rates all have the potential to disrupt the current stable picture.
Paul Smee, CML director general, comments:
"Combined efforts by borrowers, lenders and money advisers are ensuring that payment difficulties are being managed effectively, with the result that the number of repossessions remains relatively low. Repossession really is a last resort, as the numbers show. Anyone worried about their mortgage should be assured that lenders will try to help them get back on track, as long as this is a realistic prospect."
David Whittaker, managing director of Mortgages For Business said:
“The year-on-year rise in buy to let lending reflects the state of the overall property market. Demand for rental property is as strong as ever as mortgage funds remain out of reach for many would-be buyers and high-street banks remove scores of owner-occupier mortgages from the market. While the overall value of lending fell quarter-on-quarter, this has more to do with stagnant and falling prices rather than a drop in landlord appetite. Indeed, with the residential property investment sector steadily increasing its share of the overall mortgage market and with investors becoming more and more interested in higher yield complex buy to let deals, the buy to let sector seems on course for a positive year”
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