THE NUMBER of home repossessions in 2014 was at the lowest level in eight years, the Council of Mortgage Lenders (CML) said.
Some 21,000 repossessions took place last year, a 26 per cent fall on the previous year, as low interest rates and cheap mortgage deals helped to cushion households from getting into financial difficulty.
The main drivers of people getting into difficulty with a mortgage tend to be an “income shock” such as unemployment and interest rates, which influence the cost of borrowing, the CML said.
Both of these factors are “relatively benign” at the moment, the CML said. Of the repossessions recorded last year, 16,100 were on owner-occupied homes and 4,900 on buy-to-let properties - a higher sum proportionately.
CML director general Paul Smee said: “The relatively low rate of repossession among owner-occupiers - around one in 600 mortgages last year - should help to reassure borrowers that, if they do face payment difficulties, lenders will work with them to try to resolve their problems. Repossession is only ever a last resort.”
Lenders should not be lulled into a false sense of security by low rates, Mr Smee warned.
“It is essential for borrowers themselves to have one eye on the future. Think through any borrowing taken on now to ensure it will still be affordable if and when rates rise,” he added.