The total is 5,000 below the original prediction from the CML but is still the highest amount since 1996.
The figures show that by the end of 2008, 182,600 mortgages – 1.57 per cent of the total – had arrears equivalent to 2.5 per cent or more of the outstanding balance compared with 1.29 per cent, or 150,800, at the end of the third quarter of 2008 and 1.08 per cent, or 127,500, at the end of 2007.
Director general Michael Coogan says: “Despite the upward pressure on mortgage arrears and repossessions arising from the problems in the economy and rising unemployment, lenders and the Government are continuing to find more ways to help more people stay in their homes.”
New Star economist Simon Ward says the figures are encouraging when compared with the last recession. He says: “The key reason for expecting arrears’ performance to be less bad than in the early 1990s is a much lower level of income gearing. Household interest payments as a proportion of disposable income peaked at 11.9 per cent in the third quarter of 1990 but reached only 7.9 per cent at the top of the recent interest rate cycle and should fall to 4 per cent or lower as a result of rate cuts.”