Posts with tag: arrears

Mortgage Arrears and Possessions Drop Again in Q2

Published On: August 11, 2017 at 9:03 am


Categories: Finance News

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The number of mortgage arrears and home possessions in the UK dropped yet again in the second quarter (Q2) of this year, according to the latest Council of Mortgage Lenders (CML)/UK Finance data.

Mortgage Arrears and Possessions Drop Again in Q2

Mortgage Arrears and Possessions Drop Again in Q2

The amount of mortgages in arrears of 2.5% or more of the outstanding balance fell to 88,200 in Q2 – the lowest level since at least 1994, when this run of data began. This is 5% lower than in Q1 (92,600) and amounted to just 0.8% of the 11m+ mortgages currently outstanding in the UK.

Q2 also saw a decline in the number of mortgages across all arrears bands, including those with the highest levels of arrears. In the same period, the amount of mortgages with arrears of 10% or more of the outstanding balance totalled 25,200 – down by 5% from 26,500 in Q1. This brought a welcome end to a period of five consecutive quarters in which this figure had edged upwards, from 23,400 in Q1 2016.

The number of homes taken into possession also decreased in Q2, from 1,900 to 1,800 (accounting for 0.02% of all mortgages). This total was the same as in Q4 last year and is the lowest figure since quarterly data was first published in 2008.

In line with a trend that has become established in recent data, the rate of buy-to-let arrears was lower than arrears in the owner-occupier sector, although the buy-to-let possession rate was higher. This is because lenders extend a high level of forbearance to owner-occupiers, to help them overcome any period of financial difficulty and stay in their homes when possible.

The Head of Mortgages at UK Finance, Paul Smee, comments on these latest figures: “These figures show that the overwhelming majority of borrowers are managing their mortgage payments successfully, and many of those who have experienced some difficulty in the past are able to recover their financial position. The recent improvement in the number of mortgages with high levels of arrears is particularly welcome.

“Borrowers are being helped by low interest rates, but mortgage costs are certain to rise at some stage. It is important therefore for customers to plan ahead and consider how their finances would be affected in those circumstances. As ever, lenders will continue to help borrowers resolve any financial difficulty if possible, so customers should not hesitate to contact their lender if they anticipate any payment problems.”

Remember that the Bank of England recently held interest rates at 0.25%, but they are expected to go up over the next few years, albeit gradually.


Homeowners More than Twice as Likely to be in Arrears than Landlords

Published On: December 1, 2016 at 11:25 am


Categories: Finance News

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UK homeowners are more than twice as likely to be in mortgage arrears than landlords, according to Computershare Loan Services.

Homeowners More than Twice as Likely to be in Arrears than Landlords

Homeowners More than Twice as Likely to be in Arrears than Landlords

The firm, which manages over half of all outsourced mortgages in the country, has found that just one in every 166 buy-to-let mortgages (0.6%) are currently in arrears by at least one month, compared to one in every 73 homeowner loans (1.37%).

Computershare’s figures also show a significant regional disparity, with Welsh buy-to-let mortgages almost ten times more likely to be in arrears than those in the East Midlands.

Residential loans in London are more than twice as likely to be in arrears than those in the South West.

The latest House Price Index from Nationwide shows that 90% of mortgages contracted in the past 12 months were on a fixed rate, due to historically low interest rates.

The CEO of Computershare Loan Services, Andrew Jones, comments: “When mortgages fall into arrears, problems can arise for borrowers, lenders and tenants, so loans must be administered in a way that takes into consideration the individual circumstances of every customer.

“Computershare Loan Services continues to lead the way in preventing and reducing arrears by using advanced analytical systems to predict problems and facilitating support for those who need it.

“For over a quarter of a century, we’ve done everything we can on behalf of clients to work with borrowers, particularly those significantly behind on their payments, to find a solution that takes into consideration their circumstances.”

The firm currently services over £71 billion in mortgages and loans, which represents over half of the outsourced mortgages in the UK.

It’s good news for landlords, who appear to be on top of their mortgage payments. However, many will be apprehending the forthcoming reduction in tax relief on finance costs, which will be gradually introduced from 6th April 2017 and will affect around one in five investors.

The Government has provided a guide on how the change will affect you: /government-guide-tax-relief-changes-residential-landlords/