Home repossessions plunged by 93 per cent in the second quarter of this year compared with the same period last year.
Just 90 homeowner mortgaged properties were repossessed in the three-month period, according to trade association UK Finance. Meanwhile, 130 buy-to-let mortgaged properties were repossessed – showing an 80 per cent annual fall.
Outlining a £350 billion coronavirus emergency economy rescue package just pre-lockdown in March, Chancellor Rishi Sunak announced a three-month mortgage payment holiday and the temporary suspension of repossession orders, as relief for borrowers whose finances were affected by the disease.
There are exceptions though, including where the customer wants the repossession to go ahead or where the property is vacant – and the figures for the second quarter of this year reflect these cases.
More than two million mortgage payment deferrals have been approved to date, with just under one million still in place as borrowers start to exit their emergency arrangements and resume their monthly payments.
UK Finance also said mortgage arrears levels remained low in the second quarter. There were 73,580 homeowner mortgages in arrears of 2.5 per cent or more of the outstanding balance in the second quarter – three per cent fewer than in the same three months last year.
Within this total, there were 22,840 homeowner mortgages with more significant arrears, representing 10 per cent or more of the outstanding balance. This was two per cent fewer than in the same quarter of 2019.
UK Finance said that while the number of homeowner arrears increased earlier this year as people’s finances were hit by coronavirus, and have stayed at similar levels, overall arrears levels remain significantly down compared with previous years.
There were 5,000 buy-to-let mortgages in arrears of 2.5 per cent or more of the outstanding balance in the second quarter – a six per cent increase annually. Within the total, there were 1,270 buy-to-let mortgages with more significant arrears, representing 10 per cent or more of the outstanding balance. This was five per cent higher than in the second quarter last year.
The recent increase in buy-to-let arrears is relatively small and likely due to the early effects of Covid-19, said UK Finance, pointing out that these levels of arrears remain lower than seen in previous years.
Additional reporting by PA