This is 18 per cent higher than the December figure and around 1 in every 840 mortgages ended up being repossessed in the year to June.
The number of mortgages in arrears at the end of June rose to 125,100, up 4 per cent from the December figure but down 3 per cent compared to June last year, the Council of Mortgage Lenders announced today.
Of these, the majority, 71,800, were in arrears of 3-6 months, while 38,300 were in arrears of 6-12 months, and 15,000 of more than 12 months.
The CML suggests the sharp rise in possessions compared to arrears over the past two years is likely to be a result of an increasing amount of sub-prime lending within the overall market.
It also believes increasingly active arrears management by all lenders has stopped many households falling further into arrears unless their financial?situation makes this unavoidable.
CML director general Michael Coogan says interest rates are clearly higher than many were expecting, and are set to remain so, and the greater risks inherent in sub-prime lending are resulting in significantly higher levels of repossession in that part of the market compared to mainstream experience.
He says: “Overall, the vast majority of mortgage borrowers will continue to cope even in a market where affordability is stretched.”
The CML has substantially revised its previously published data back to the beginning of 2003 and in the light of the data revisions it has withdrawn its forecasts for arrears and possessions issued at the start of the year.
Coogan says: “This impact has been underestimated in our past market data, which we have now revised. While the revisions are naturally unwelcome, more accurate market information is important. We will work to further improve data on both mainstream and specialist sectors.”
IMLA executive director Peter Williams says: “There is some deterioration in the figures but they are still exceedingly low by historic standards. If we compare the number of mortgages 12 months or more in arrears with the same period of 1993, we find it is almost 11 times lower.
“Arrears have been fairly steady for the past few years and this tick-up takes arrears up to 2002 levels and possessions up to H2 1999 levels – a world away from the problems of the early 1990s. While any increase is unwelcome by both lenders and borrowers we do need to keep this in perspective.”