Belfast Telegraph

Figures show lowest level of home repossessions since 1982

The number of homes being repossessed fell to the lowest levels since 1982 last year, figures from banks and building societies show.

Some 7,700 repossessions took place in 2016, down nearly 25% on the 10,200 cases seen in 2015, the Council of Mortgage Lenders (CML) said.

The annual total was the lowest seen since 6,900 repossessions were recorded in 1982.

Repossessions have been generally declining since reaching a recent peak of 48,900 cases in 2009.

Ultra-low mortgage rates have been keeping borrowers' mortgage payments relatively affordable.

The CML also said the number of mortgages in arrears fell during the course of 2016.

At the end of last year, there were 94,100 mortgages with arrears of more than 2.5% of the outstanding balance, compared with 101,700 at the end of 2015.

But despite the general decline in arrears, there was an increase across 2016 in the number of mortgages in arrears of more than 10% of the outstanding balance, from 23,700 to 26,000.

The CML said that in the buy-to-let sector, the number of mortgages in arrears remained broadly unchanged over the last three months of 2016, while the number of owner-occupier mortgages in arrears edged upwards. The arrears figures for both buy-to-let and owner-occupier mortgages were lower than they had been at the end of 2015.

The CML said the timing of some repossessions last year may have been affected by a court case that caused lenders to review their processes.

The body's director general Paul Smee said: "It is encouraging to see another improvement in arrears and possessions during a year in which borrowers were clearly helped by the downward trend in mortgage rates.

"But customers do need to be ready for a time when the outlook may not be so benign, with pressure on real incomes increasing and as interest rates begin to move upwards again.

"As ever, borrowers who fear they may miss a payment should speak to their lender. Lenders remain committed to helping borrowers work through any period of temporary payment difficulty and remain in their home wherever possible."

Jonathan Harris, director of mortgage broker Anderson Harris, said many people could be "teetering on a knife edge" financially - and a change in their circumstances or a rise in rates could push them over.

He said: " While repossessions and arrears are on the decline, there are still many home owners being repossessed or finding themselves in arrears on their mortgage each year, which begs the question: what will happen when interest rates start to rise or if they were to lose their job? How will people cope?"

Mr Harris said borrowers should consider how they would cope with higher mortgage rates and those who may struggle could perhaps consider a fixed-rate mortgage.