The number of mortgage borrowers behind with their repayments surprisingly fell in the first quarter of 2010 according to the Council of Mortgage Lenders (CML).
The proportion of loans with arrears equivalent to 2.5 per cent or more of the mortgage balance was 2.38 per cent, down from 2.52per cent in the previous quarter and 2.81 per cent in the first quarter of 2009. The total number of loans in arrears was down from 206,800 at the end of the first quarter of 2009 and 196,400 at the end of last year to 186,300 at the end of the first quarter of this year. In addition, the CML noted that the number of repossessions also fell in the first three months of 2010 compared to the previousquarter.
However, the council said that the respite in arrears and repossessions may prove temporary as interest rate and tax rises are likely over the medium term. "The dampening effects on households and the wider housing market that fiscal tightening is likely to exert are still to be felt, but it should be a priority to support borrowers most in need and maintain funding for the Government's housing policies," said Michael Coogan, CML's director general. "We expect to be able to revise down our 53,000 2010 forecast for repossessions, but we are conscious of the beneficial influence that low interest rates and the support package have played so far," he added.