Number of house repossessions falls further
13/11/2014
The number of homes being repossessed in the UK has fallen for the third quarter in a row.
There were 5,000 homes repossessed in the UK in the third quarter of this year, compared with 5,400 in the second quarter, and 7,200 in the same period of last year.
The figures released by the Council of Mortgage lenders (CML) also shows the number of people falling into arrears on mortgage repayments has decreased. The report shows that 125,100 mortgages had arrears of more than 2.5% of the outstanding balance, compared with 131,400 in the last quarter and 149,400 at the same time in 2013.
Homes are repossessed by mortgage lenders when owners fall too far behind on their mortgage repayments.
Experts believe the fall in repossessions may be due to the current interest rate being at the lowest ever, 0.5%, which is keeping mortgage rates down. This is predicted to rise sometime next year, and concerns have been expressed about the effect that an increase could have on everyday monthly mortgage repayments for individuals.
To help combat this, Mortgage Market Review (MMR) resulted in new rules meaning borrowers must go through rigorous tests via the lenders to establish if they are in a financial situation to cope with higher monthly mortgage repayments. The aim of this was to make sure borrowers could pay back their mortgage each month even when interest rates rise.
CML director general Paul Smee said:
"We expect any uptick in payment difficulties to be relatively muted if and when rates do begin rising,"
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