Property Repossessions At Five Year Low

Thursday, November 21, 2013
Property Repossessions At Five-Year Low

Property Repossessions At Five-Year Low

Property Repossession Figures Reported To Be Better Than Expected

The latest data from the Council of Mortgage Lenders (CML) shows that the number of residential properties being repossessed has fallen to its lowest level since 2008, the figures include private residential properties and Buy-To-Let properties within the UK private rental sector.

The CML data reveals that 7,200 property owners, including landlords, were repossessed due to severe mortgage arrears during the third quarter of this year, making Q3 2013 the lowest quarterly figure recorded by the CML and figures are 5.3% below the number of repossessions in the preceding quarter.

The CML forecast less than 30,000 residential property repossessions this year, including taking control of struggling landlords properties, some 5,000 fewer than had previously been predicted by the CML at the start of the year and would put the annual number of property repossessions, including buy-to-let properties, at the lowest level since 2007.

The Council of Mortgage Lenders next housing market forecast is due to be published in December 2013 and is eagerly awaited by many lenders because the CML plan to revise the previous prediction of 37,000 repossessions, due to the better than expected repossession figures in the third quarter of this year. The total volume of property owners who are behind with mortgage payments has also fallen to similar levels not seen since the summer of 2008.

Just 1.33% of lenders mortgaged stock showed payment arrears equivalent to more than 2.5% of their mortgage balance at the end of the third quarter. That is a total of 149,400 mortgages in arrears in the UK. While this news may not make good reading for struggling landlords who don’t use Rent Guarantee Insurance to protect rental income and ensure that the Buy-To-Let mortgage can be paid, the latest quarterly arrears data shows that almost 10,000 fewer mortgages are in arrears compared with the same quarter in 2012.Low Bank of England (BoE) interest rates and the Government’s financial incentives such as the Help-To-Buy scheme (HTB) and the Funding for Lending scheme (FLS) have helped to keep many mortgage payments affordable despite rising utility bills and slow wage growth.

Rent Guarantee Insurance

Rent Guarantee Insurance

Many UK private rented sector landlords are making use of innovative products such as Rent Guarantee Insurance to protect their regular rental income, ensuring that the rent will still be paid should tenants suddenly have a change in circumstances.

The continuing fall of buy-to-let mortgage arrears and property repossessions in the private rental sector are continuing to drop because landlords are doing more research and making use of rent guarantee insurance products to keep their income flowing.

CML Director General, Paul Smee said: “The continued reduction in payment difficulties is obviously very welcome. However, it still makes sense for property owners to think about how they will cope with higher mortgage payments when interest rates rise”.

The UK economy is still improving faster than many financial pundits really expected, and the prospect of an interest rate rise before 2016 means mortgage affordability and continued rental income will remain vital indicators for landlords for the foreseeable future.

Find out more about Rent Guarantee Insurance products by Legal 4 Landlords

This was written by Mike Clarke. Posted on at 11:35 am. Filed under Buy To Let, Insurance, Landlord News. Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. Follow comments here with the RSS feed. Both comments and trackbacks are currently closed.