The number of mortgages in arrears hit record lows in the third quarter of 2017 but repossessions ticked up, lenders say.
Data from the UK Finance trade body show that the number of mortgages in arrears of 2.5% or more of the outstanding balance fell to 88,300, the lowest level since the data was first recorded in 1994.
The number of mortgages in arrears fell across all bands, apart from those owing 10% or more, which edged up by 0.4% from 25,500 to 25,600,
However, the number of properties taken into possession in the third quarter nudged upwards for the first time since 2014 to 1,900, although it only took the number of repossessions back to the same total as in the first three months of this year.
Commenting on the figures, Jeremy Leaf, estate agent and a former RICS residential chairman, said: “These figures show on the one hand that low interest rates have helped keep arrears in check, but on the other, possessions edging up is evidence of increased lender confidence in selling properties owned by those in greatest debt.
“Looking forward, upward pressure on interest rates is likely to increase arrears as borrowers ‘on the margins’ always tend to be most vulnerable.”
Meanwhile, figures from Spicerhaart Corporate Sales show that the amount of time from taking a house into possession until its sale has reduced from 154 days to 115 over the past year.
Dave Miller, client account manager, said the firm now achieves an average of 110.50% of the asking price for all the properties taken into possession, up from 98.6% a year ago.
He said: “It is a myth that repossessed homes are sold off cheaply. Lenders, asset managers and corporate sales departments like ourselves have a duty of care to get the best possible price for a repossessed property.
“By ensuring that we engage with the prominent local estate agent to market and sell the property, we are able to take full advantage of the property market we currently have.”