HOME repossessions slid to their lowest levels since 2007 in the first six months of this year, banks and building societies have said.
The number of possession cases totalled 15,700 in the first half of 2013, marking the lowest six-monthly figure seen since the second half of 2007, according to the Council of Mortgage Lenders (CML).
The lending body said that struggling home owners will have taken “some encouragement” from the Bank of England’s indication yesterday that historic low interest rates are here to stay for some time to come.
The CML’s new figures showed there were 7,700 repossessions in the second quarter of this year, which was almost 4% lower than the 8,000 recorded over the post-Christmas period in the first three months of 2013.
It said that “at this stage” it stands by a previous forecast that repossessions for the whole of this year will remain at around 35,000, putting them at levels similar to a five-year low recorded across 2012. The number of mortgages in arrears fell to its lowest levels since autumn 2008 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.
The figures also showed that the number of people struggling with severe arrears of 10% or more of the balance was unchanged between the first and second quarters of 2013, at 30,300.
The number of repossessions has generally stabilised at lower-than-anticipated levels since the economic downturn started.
Mortgage rates have already plummeted since the launch of a Government scheme one year ago called Funding for Lending. Experts have said that lower-for-longer interest rates could result in already ultra-low mortgage deals being made even more attractive.
Some mortgage holders have seen the value of their home increase in recent months as confidence returns to the housing market. There have been signs that some strong house-price increases seen in London and the South are filtering out across a wider area of the country.
CML head of policy Jackie Bennett said: “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.
“Wednesday’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.”