Home repossessions down by 52%
The number of home repossessions and mortgages in arrears fell to a new low in the first quarter of the year as rock-bottom interest rates and an improving jobs market helped owners.
Figures from the Council of Mortgage Lenders (CML) showed 3,100 properties were taken into possession during the period - down 26% on the previous quarter and 52% lower year on year.
This was the lowest since quarterly records began at the start of 2008, but the CML said the drop in possessions might have been overstated as many lenders postponed decisions amid a key legal case involving Bank of Scotland in Northern Ireland.
The CML believes repossession rates may be inflated as a result in the second and third quarters.
But it said the underlying picture of gradual decline in repossessions and arrears continued.
The proportion of mortgages with arrears equivalent to 2.5% or more of the total loan value was 1.03% at the end of the first quarter - down from 1.05% in the fourth quarter of 2014 and well down on the 1.24% recorded at the same time last year.
Of the 113,900 total loans in arrears, 24,400 were in the most severe band where more than 10% of the balance is in arrears - the lowest since the end of 2008.
Paul Smee, director general of the CML, said: "Although complacency would be misplaced, the underlying picture continues to be one of improvement and a continuing reduction in mortgage arrears and repossessions.
"The message remains the same: don't delay in contacting your lender if you are experiencing temporary payment problems, as lenders want to help you resolve them, and will only take possession of property as a last resort."
Jonathan Harris, director of mortgage broker Anderson Harris, warned of the potential impact of interest rate rises on struggling homeowners.
He said: "Even though we have had a benign interest rate environment for some years now, there are likely to be people whose finances are teetering on a knife-edge and rate rises could easily push them over.
"Borrowers must keep their lender in the loop if they are struggling with their mortgage. It is much easier and less stressful to come up with solutions early on than further down the line when the options may be much more limited."
There was some reassurance from the Bank of England yesterday when its latest quarterly inflation report appeared to endorse market expectations that interest rates would not rise from the current level of 0.5% until the middle of 2016.
Governor Mark Carney stressed that the pace of rate rises would be more gradual than in the past due to continuing pressures on the economy.
The CML data showed that of the repossessions recorded in the first quarter, 2,300 were on owner-occupied homes and 800 on buy-to-let properties.