The Council of Mortgage Lenders (CML) has released data which shows a decline in mortgage arrears and repossessions over the past 12 months. In Q3 this year, 2,500 properties were taken into possession which is a 50% reduction in comparison to Q3 2014. Figures show that 0.94% of all mortgages were in arrears of more than 2.5% of the mortgage balance; however this is 14% lower than the same time last year. The data has also been broken down into owner-occupier and buy-to-let mortgages; showing fewer buy-to-let mortgages are in arrears as compared to owner-occupier.
Figures released also show that the mortgage lending market is on an upwards trajectory. Due to competitive mortgage rates, first-time buyers saw month-on-month (when compared to August 2015) and year-by-year (when compared to September 2014) increases in lending activity, both by volume and by value, in September 2015. This is due to the record low proportion of household monthly income required to meet capital and interest rate payments of their mortgage at 18.3%. First-time buyers increased the number of loans advanced in the third quarter of 2015, when compared to the second quarter of 2015 and the third quarter of 2014.
When discussing the favourable trends, Paul Smee, Director General of the Council for Mortgage Lenders stated:
“With competitive rates and high levels of product choice currently available, alongside generally improving economic conditions, we expect this to continue as we head into the new year.”