The level of mortgage arrears has dropped to the lowest quarterly rate on record, found a new study by the Council of Mortgage Lenders (CML).
The research recorded 92,600 mortgages in arrears, representing 0.84% of all mortgages, in the first quarter (Q1) of this year.
This level of mortgage arrears is down by 10% on an annual basis.
However, those borrowers with mortgage arrears of more than 10% did see a slight rise, to 26,500.
In line with the usual trend, the number of buy-to-let mortgage arrears was lower than the owner-occupier rate, at 5,000, although the repossession rate was higher.
This is because of the high level of forbearance that lenders typically seek to extend to homeowners, to try to enable them to resolve their difficulties and keep their homes wherever possible.
The Director General of the CML, Paul Smee, comments on the mortgage arrears figures: “This positive picture of mortgage performance is good news, and reflects a continuing benign interest rate and employment environment.
“However, it is important that borrowers continue to think about the future and how they would cope with less positive conditions, even if that scenario seems distant.
“Lenders will always work with borrowers to try to help them through the inevitable periods of difficulty that life may throw at them, such as periods of unemployment, illness or relationship breakdown.”
Brian Murphy, the Head of Lending at the Mortgage Advice Bureau, also responds to the data: “This is positive news, but we also need to recognise that, what with everything that’s currently occurring in terms of political and economic climate, borrowers do need to factor into their household budgets that interest rates will, at some point in the future, move upwards.”
Landlords, remember that if you have a buy-to-let mortgage, the amount of tax relief that you can claim on interest costs is being cut to the basic rate of Income Tax.
Find out more about the changes here: https://landlordnews.co.uk/government-guide-tax-relief-changes-residential-landlords/