The number of mortgages in arrears is the lowest it’s ever been since records began 20 years ago, a study has found.
The Council of Mortgage Lenders (CML) said there were 92,500 mortgages in arrears at the end of June compared to 106,800 for the same month last year.
The number of properties taken into possession also fell in the second quarter to 1,900, down from 2,100 in the first three months of the year.
The CML said: “If the present trend continues, the number of mortgaged property repossessions this year is on course to be the lowest since 1982, when there were 6.5 million mortgages compared to 11.1 million today (August 11).”
The Association of Mortgage Intermediaries (AMI) said in a report that the possession figures raised a question – is there a problem brewing in banks?
The trade body for brokers said this is a potentially disproportionately low proportion of possessions given the number of borrowers in fairly serious arrears.
It added: “Nobody wants to lose the roof over their head but if they are in serious arrears and have little to no hope of getting back in control of their payments, AMI would ask whether it would be fairer for the customer to agree a faster possession process. This would mean minimising the debt outstanding by reducing the penalties in arrears.”
The trade body added that the industry’s relationship with the Financial Conduct Authority is under strain.
It said: “The regulator fails to communicate with firms resulting in a sort of ‘blind examination’.
“Regulation has got it wrong in that it is nearly impossible for lenders, unless they use fully qualified advisers, to have a reasonable conversation with borrowers in difficulty without it straying out of generic guidance into fully regulated debt counselling.”