Fall in home repossessions in the UK

The number of properties taken into possession by mortgage lenders declined in the second quarter of 2013, according to data published by the CML today. 

At 7,700, the number of possession cases was almost 4% lower than the 8,000 recorded in the first three months of the year, and was equivalent to 0.07% of all outstanding mortgages. 

In the first six months of the year, the number of cases of possession totalled 15,700, the lowest number since the second half of 2007, when there were 13,100 cases.

There was also a reduction in the number of mortgages in arrears in the second quarter. At the end of June, a total of 157,700 mortgages (equivalent to 1.4% of all loans) were in arrears of 2.5% or more of the balance, down from 159,700 at the end of March, and the lowest number recorded since the end of the third quarter in 2008.

Within the total number of mortgages in arrears at the end of June, 80,800 had arrears of more than 2.5% but less than 5% of the balance, 31,600 were in the range of 5-7.5% of the balance, 15,000 at between 7.5-10% of the balance, and 30,300 with arrears of 10% or more of the balance.

The CML's most recent forecast for 2013 is that there will be 35,000 cases of possession during the year, with 160,000 mortgages ending the year in arrears of more than 2.5% of the balance. At this stage, the CML has no imminent plans to revise the forecast.

Commenting on the data, the CML's head of policy Jackie Bennett said:

"Given the pressures on household incomes, the continuing modest decline in arrears and possessions is welcome. Low interest rates and lower than expected unemployment are providing some relief for households, and borrowers are continuing to prioritise mortgage payments while lenders are showing forbearance where it is viable.   

"Yesterday's message from the Bank of England provides some encouragement to those borrowers who are struggling that any rise from the current historically low Bank rate will be linked to an improvement in the wider economy. As ever, the key message for those borrowers is that they should talk to their lender as soon as possible if they believe they are in danger of missing a mortgage payment. Lenders want to keep people in their homes where possible, and most problems can only be contained if the borrower and lender work together at the earliest opportunity on a solution tailored to the borrower's circumstances."

Buy-to-let lending at highest level since 2008

BUY-TO-LET mortgages are at their highest level since 2008 and up 19% on last year.

Lenders advanced 40,000 mortgages, worth £5.1 billion, to buy-to-let investors in the second quarter of 2013, according to data published today by the CML. 

Both the number of buy-to-let loans, and the value of lending, were the highest since the third quarter of 2008.

Buy-to-let lending is continuing to recover strongly, but from a low base.

The number of loans advanced in the second quarter was 19% higher by volume and 21% higher by value than in preceding three months (when lenders advanced 33,500 mortgages, worth £4.2 billion). Year-on-year, buy-to-let lending was 19% higher by volume and 31% higher by value (33,600 loans in the second quarter of 2012, worth £3.9 billion).  

Lending for house purchase accounted for around half the buy-to-let loans advanced, and increased by 15% by volume and 19% by value over the preceding quarter. 

But the growth in remortgaging was stronger, with an increase over the same period of 24% by volume and 29% by value. This growth in remortaging partly reflects improved conditions in funding markets and more widespread availability of mortgage credit.

By the end of June, buy-to-let mortgages accounted for 13.3% of outstanding lending in the UK (up from 13.1% in the preceding quarter and 12.9% a year earlier). The number of outstanding mortgages totalled 1.48 million, worth £168.5 billion.

Buy-to-let mortgages in arrears of over three months accounted for 8.4% of the total, up slightly from 8.3% in the preceding quarter but down from 9.7% a year earlier. The possession rate, at 0.09%, was higher than the 0.07% in the wider mortgage market, but fell from 0.11% in the previous quarter.

Commenting on the data, the CML's head of policy Jackie Bennett said:

"Strong rental demand is contributing to the continuing expansion of the buy-to-let sector, but growth is also being helped by improved conditions in funding markets and more widespread availability of mortgages. 

"These conditions are creating more opportunities for landlords to remortgage, as well as helping to fund increased activity in the mortgage market more generally. This spring, we have seen the highest levels of lending to first-time buyers since 2007, alongside the continuing recovery in the buy-to-let market."