An encouraging new report indicates that the repossession rate continued to drop during the second quarter of 2015, despite already being at its lowest ever level.
A review from the Council of Mortgage Lenders shows that the rate fell to 0.02%, equivalent to just 1 in 5,000 mortgages. Even more encouraging was the fact that arrears also continued to fall.
In all, there were 2,500 properties taken into possession during the second quarter of this year, a reduction from 3,000 in the previous quarter and 5,400 from the same period last year. Of these properties, 1,800 were in the owner-occupier market, with 700 in the buy-to-let market.
The total number of mortgages with arrears akin to 2.5% or more of the mortgage balance was 106,400, representing 0.96% of all mortgages. This was the lowest since records began in 2008.
For loans with arrears in excess of more than 2.5% of balance, 100,700 were owner-occupier and 5,700 buy-to-let. In both the owner-occupier and buy-to-let markets, the total and proportion of mortgages in arrears dropped or remained consistent in all bands. 
‘Across all measures, mortgage arrears and repossessions are continuing to improve,’ said CML director general Paul Smee. ‘We continue to see some amplification of the downward trend in repossessions, which may bring into question our repossessions forecast for 2015 as a whole.’
Smee noted that this trend, ‘is very welcome,’ and ‘Low interest rates are acting as a significant support for home-owners in general, and are likely to be helping to stave off low level arrears for stretched households in particular.’ He went on to say, ‘as ever, we urge borrowers to think ahead to when interest rates rise and to contact their lender without delay if they are in difficulty-prompt action helps to prevent problems worsening.’
Arrears and repossessions fall in Q2
Brian Murphy, Head of Lending at Mortgage Advice Bureau, commented, ‘a record low for repossessions and the falling number of loans in arrears have been two of the big success stories for mortgage borrowers in the post-recession era. Both measures continue to show signs of considerable improvement and consumers are clearly finding it easier to keep personal finances from slipping away from their control.’
‘The record low base rate has played a big party in helping households keep their loan commitments in check. The prospect of a higher base rate is clearly the biggest single factor that threatens this progress, but rate rises will be slow and steady – giving consumers plenty of time to adjust. The tightening of loan criteria following the Mortgage Market Review (MMR) will also help keep things on a stable footing moving forward,’ Murphy continued.
Mr Murphy concluded by saying the reactions to yesterday’s unemployment figures, ‘show the timing of the first rise remains a moving target, but homeowners should still take the chance to safety-proof their finances well in advance. Looking into the current rates before the winds change is likely to prove a wise move and there has seldom been a better time to seek a well-priced remortgage deal.’