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Mortgage Arrears Drop to Lowest Level on Record
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
The amount of mortgage arrears has dropped to the lowest level on record, according to the Council of Mortgage Lenders (CML).
Mortgage Arrears Drop to Lowest Level on Record
The total number of mortgages in arrears as of June 2016 was 92,600 – down by 13.4% on last year, when it stood at 106,800.
Homeowners with residential mortgages saw arrears of at least 2.5% fall to 87,900 in June, while buy-to-let mortgage arrears dropped to 4,700.
There was also a decline in the number of owner-occupied and buy-to-let property repossessions – from 1,500 to 1,300 for homeowners and from 700 to 500 for landlords.
The CML reports that the number of mortgaged property repossessions is on course to be the lowest since 1982 this year.
The findings arrive as Ministry of Justice data shows that there were 42,729 rental evictions – for both the social and private sectors – in England and Wales in 2015, compared to 5,592 mortgaged property repossessions, despite the fact that rental housing accounts for just one-third of the total housing stock.
The CML believes that lenders try to avoid repossession wherever possible to help owner-occupiers recover from a temporary period of financial difficulty, but landlords may move more quickly to protect their investment properties.
The Director General of the CML, Paul Smee, comments: “Another welcome reduction in arrears and possessions shows that borrowers are continuing to prioritise their mortgage commitments and that lenders remain committed to helping them through a period of temporary difficulty, wherever possible.
“As ever, the key to success in dealing with any payment problems is to address them as soon as possible. Any borrowers anticipating difficulty in paying their mortgage should therefore speak to their lender at the earliest opportunity.”
Buy-to-let landlords must be aware that their finances may be affected by forthcoming changes to mortgage interest tax relief. From April 2017, the amount of tax relief that landlords can claim against mortgage interest will be cut to the basic rate.
Use the Government’s guide to help you prepare for the changes: /government-guide-tax-relief-changes-residential-landlords/
