Six long years have passed since the economic crisis and finally it seems the housing market is getting back on track with more people able to Buy a House or find Property to Rent. There is debate for how long these positive numbers can continue but for now they show signs of recovery.
At the same time as unemployment is declining and lower borrowing rates, the amount of home owners failing to repay their mortgage has declined to 28,900 (15%), it’s lowest in six years, according to Council of Mortgage Lenders.
Since the amount of repossessions peaked in 2009 lenders have become more effective at managing accounts in arrears and the economy has slowly but steadily improved. Also with policy support and lender forbearance, repossession really is the last resort for lenders.
At the end of last year, 1.29% of mortgages have 2.5% arrears loan balance, significantly lower than the 1.88% in 2009. A decline in arrears has also been recorded in all areas like 10% arrears band of mortgages and the first time the amount of people in severe arrears trying to Find Property has fallen since 2010.
While the numbers are painting a pretty picture, Debt Advisor warns that sustainability might be affected when interest rates rise from 0.5%. There are a lot of families around the U.K. who are just making ends meet and if interest rates rise significantly it could result in increased repossessions. The stats are encouraging but they should also be a reminder that interest rates will not remain low and it’s important that families plan for the potential increase.
People who are concerned about making their repayments, especially if there is an increase in interest rates after the next election then it’s recommended to speak to their lenders. We might think that banks aren’t on our side – and maybe they’re not but they also don’t want to through you out of your home and will try to keep you there.