Home repossessions drop amid low interest rates…

The number of homes seized by lenders due to owners falling behind on their mortgage repayments has fallen to a new low.

Repossessions of homes in the UK fell from 1,900 in the first quarter of the year to 1,800 in April to June, according to lenders’ trade body UK Finance.

This is the lowest since quarterly data was first published in 2008.

The number of people falling behind with repayments also fell.

Those mortgages in arrears of 2.5% or more of the outstanding balance fell to 88,200 in the second quarter of the year – the lowest level since this data was first collected in 1994. This was down 5% on the first three months of the year.

Low interest rates have generally helped to keep mortgage repayments at affordable levels, even for families with stretched finances.

‘Plan ahead’

There was also a drop in the number of homeowners seriously behind on their monthly payments, reversing a recent trend.

There were 25,200 mortgages in arrears of 10% or more of the outstanding balance, down 5% on the first three months of the year and ending a run of five successive quarters of increases.

Paul Smee, head of mortgages at UK Finance, said: “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.”