New figures released by UK Finance has shown that whilst the numbers of homeowners in arrears have remained at a historic low there has been an increase of 15% (1,270) in the number of repossessions in the second quarter (Q2) of 2019. UK Finance said repossessions were still well below levels experienced between 2009 and 2014.

The proportion of homeowner mortgages in arrears remains at historically low levels, with the vast majority of borrowers continuing to repay their mortgages in full and on time each month.  There were 75,890 homeowner mortgages (0.84 per cent of all residential mortgages outstanding) in arrears of 2.5 per cent or more of the outstanding balance in the second quarter of 2019 , three per cent fewer than in the same quarter of 2018. Within the total, there were 23,370 homeowner mortgages with more significant arrears (representing 10 per cent or more of the outstanding balance on their mortgage), two per cent lower than in the same quarter of 2018.

There were 4,660 buy-to-let mortgages (0.24 per cent of all buy-to-let mortgages outstanding) in arrears of 2.5 per cent or more of the outstanding balance in the second quarter of 2019, five per cent more than in the same quarter of the previous year. Within the total, there were 1,200 buy-to-let mortgages with more significant arrears (representing 10 per cent or more of the outstanding balance on the mortgage), 12 per cent higher than in the same quarter of the previous year. Although there have been some increases in buy-to-let arrears, these are small and from a low base.

Commenting on the figures, Mark Pilling, Managing Director at Spicerhaart Corporate Sales said “The latest UK Finance figures show that while the number of homeowners in arrears remains historically low, properties taken into possession has increased by 15 per cent.”

“But I don’t think this is necessarily the sign of a reversal in the trend, it is more likely, as UK Finance suggests, to be as a result of a backlog of historic cases which have been taken into possession in Q2. Our experience shows that lenders continue to do all they can to help borrowers in difficulty with a range of solutions to assist them deal with the difficulties faced.”

“There are some instances though where despite the assistance that a lender can provide, repossession becomes the most viable option and also the best customer outcome. Managing these cases as early as possible is in the best interest of all parties.”

“It is therefore imperative that lenders identify those who are already having difficulties managing their mortgage or are likely to in the future, as early as possible so that they can find a solution before repossession becomes the only option. We work with lenders across the UK managing their arrears and repossessions to find the best solutions for them and their customers.”