Not since 2006 has the UK seen fewer houses repossessed, or in mortgage arrears, than there were last year. People have been protected from becoming embroiled in financial difficulties, thanks to fixed-rate mortgage costs decreasing significantly.
Last year saw approximately 21,000 homes repossessed, representing a 26 per cent decrease compared to the number of houses repossessed in 2013. The number of mortgages in arrears last year dropped to 1.05 per cent from 1.29 per cent in 2013.
These declines come amidst the UK housing market appearing to be slowing down, according to the Royal Institution of Chartered Surveyors (RICS).
Jonathan Harris, director of Anderson Harris, the mortgage broker, said: “Repossessions continue to fall, while the number of borrowers in arrears has also declined. This is to be expected with rock-bottom interest rates and improving employment numbers, as well as lenders prepared to be flexible and show forbearance.”
However, experts are trying to highlight how the current situation is precarious, because if interest rates rise next year, as expected, it could result in financial difficulties for people.
Harris identified this, when he added: “There are still tens of thousands of home-owners being repossessed each year, which begs the question: what will happen when interest rates do start to rise? How will people cope?”
Intense competition between banks has led to interest rates hitting record-lows lately, with borrowers also finding that funding is easier to access than before.
