2015 saw lowest arrears in decade

Last year saw the lowest arrears rates in more than a decade, figures from the Council of Mortgage Lenders have revealed.

In 2015 just 0.92% of mortgages were in arrears, with homeowner arrears standing at 1.03% and buy-to-let at 0.31%.

Paul Smee, CML director general, said: “Of course it is good news that the levels of mortgage arrears and repossessions remain low and falling.

“But, at the risk of sounding as if we are crying wolf, we would continue to urge all borrowers to plan ahead for a time when the interest rate environment may be less benevolent.

“Lenders do not wish to see borrowers who are coping currently falling into difficulty if and when rates do eventually rise.”

The total number of repossessions in 2015 stood at 10,200, down from 20,900 the year before.

Repossessions were more common for buy-to-let landlords at around one per 2,500 compared to one in 5,000 for homeowners.

Kevin Purvey, chairman of the Intermediary Mortgage lenders Association, said: “The continuing fall of arrears and repossessions suggests we remain in a period of relative stability for both owner-occupiers and landlords when it comes to managing borrowing commitments. Lending volumes forecast to rise, the rigours of lenders’ affordability checks will help borrowers avoid a future scenario where they become overstretched.

“However, continuing delays to the Bank of England’s first rate rise should not breed complacency. With mortgage rates at record lows, there is still plenty of reason for households to think ahead, weigh up their monthly balance sheet and consider remortgaging to help prepare for the inevitable rise. Changes to tax allowances will give landlords added incentive to look at their remortgage options in 2016.

“Lender competition remains high, which means intermediaries will be at the heart of the continuing remortgaging revival as borrowers seek expert advice on the best option to suit their needs.”