CML: Mortgage arrears and repossessions fall

The number of people falling into arrears with their mortgage repayments fell during the first quarter of 2015, according to data provided by the Council of Mortgage Lenders (CML). 

Some 1.03 per cent of homeowners had mortgage arrears that exceeded 2.5 per cent of their balance during this time, compared to 1.05 per cent in the fourth quarter of 2014. 

That means there are still 133,900 loans that stand in arrears, 24,400 of which are in the highest band of more than ten per cent of the total balance. 

Similarly, the number of homes that were repossessed fell from 0.04 per cent in the last quarter of 2014 to 0.03 per cent in the first quarter of 2015. 

Paul Smee, CML director general, suggested that while it would be wrong to be complacent about these figures, overall there is an improvement in the reduction of repossessions and arrears. 

Both owner-occupier and buy-to-let lending experienced a fall in the number and amount of arrears and repossessions, which is a positive sign. However, the fact remains there are still a significant number of homeowners who are struggling to pay their mortgage each month. 

Mr Smee was keen to remind people who may be experiencing financial difficulties to take action sooner rather than later. 

"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," he said. 

In April, the BBC reported that some 40 per cent of homeowners with mortgages could experience problems if they wanted to move as they would have trouble qualifying for a new loan. The issue has come about as a result of stricter checks on mortgage applicants that were introduced 12 months ago.