UK Finance mortgage arrears and possessions data for Q2 reveals an 8% drop in possession numbers since Q1, down to 1150, and 14% lower than a year ago. The decrease takes the total “significantly below” the long-term average, UK Finance said.
Possessions currently taking place relate mainly to older mortgages, with more than two thirds relating to mortgages arranged at least a decade ago. Possession of buy-to-let properties fell by 22% in Q2 compared to Q1, and by 20% year-on-year.
The number of homeowner mortgages in arrears also fell slightly, down 1% to a total of 77,940. Mortgages in arrears accounted for 0.89% of all homeowner mortgages outstanding.
Ian Harris, NAEA Propertymark president, said the figures are “encouraging” but warned financial pressures continue to affect homeowners and landlords.
“The reduction in mortgage arrears and repossessions is welcome, but affordability remains a challenge for many across the housing market”, he said.
“With the majority of possessions relating to older mortgages, continued collaboration between lenders, agents and policymakers will be important in supporting those at risk and maintaining confidence and stability across the housing market.”
Mark Harris, chief executive of mortgage broker SPF Private Clients, said the downwards trend has been boosted by the Bank of England’s decision to hold base rate at 3.75%, which is helping borrowers with affordability.
He added: “The figures also indicate that lenders continue to show forbearance and are working with borrowers to try and find a solution when the latter find themselves in difficulty.
“For a lender to take repossession of a property really is the last resort – they would much prefer an open dialogue way in advance of this needing to happen.”
