Lenders are agreeing to help borrowers struggling to make their mortgage repayments in a record proportion of arrears cases.
The Financial Times reports formal arrangements to suspend or reduce repayments represent 44 per cent of mortgages in arrears based on Bank of England data. This is the highest level of forbearance since the Bank started measuring it in 2007.
But overall the number of mortgage arrears cases has fallen from its peak of 81,469 in the first three months of 2009 to 28,749 between January and March this year.
Council of Mortgage Lenders director general Paul Smee told the newspaper: “Another fall in arrears and possessions is clearly welcome and shows that borrowers, lenders and money advisers are generally continuing to work well to contain payment problems where they arise, helped by an improving economy and low interest rates.
“But rates will rise at some stage, of course, and borrowers should be planning for that now.”
Accountancy firm Moore Stephens head of restructuring and insolvency Jeremy Wilmont says: “The fact that so many homeowners are struggling with their mortgage repayments when interest rates are still at historic lows does not bode well for households’ ability to cope when rates do rise.”