Arrears and repossessions increase but rates “extremely small”

The Council of Mortgage Lenders (CML) has released new statistics on mortgage arrears and property possessions, revealing a rise in the number of people battling with debt management.

Possessions have increased to 0.16 per cent from 0.11 per cent recorded throughout last year. The rate is now similar to numbers seen in the late 1990s, according to the CML.

Meanwhile, the number of households with arrears has climbed to 1.33 per cent of all mortgages, from 1.1 per cent at the end of 2007 and 1.02 per cent halfway through last year.

However, the CML say the figures are “not surprising” given the credit crunch limiting the amount of new adverse credit mortgages available. Fewer people are now able to remortgage as a means to manage debt repayments, it said.

It also commented that its predicted figures of 45,000 possessions and 170,000 mortgages in arrears of over three months this year were “extremely small” considering in the UK there are 11.74 million mortgages.

Earlier this week, the CML said it was “surprised” by the Financial Service Authority’s comments on specialist firms’ handling of people in arrears.

By Morwenna Kearns