Why lower repossession figures don’t always mean fewer instances of financial difficulties

The number of homeowner mortgages in arrears of 2.5% or more of was also down – by 5%.

Buy-to-let arrears were unchanged and the number of properties taken into possession was down across residential and buy-to-let, with homeowners’ repossessions down 3% and buy-to-let down 14%.

I think there are a number of reasons why actual repossessions are so low - rather than notice for possessions which are up according to the Ministry of Justice figures out last week.

But the main one is because, over the past few years, lenders are working closely with borrowers in financial difficulty to ensure that all suitable forbearance options are considered.

Lower repossession figures do not necessarily mean fewer instances of financial difficulties. Instead, it is evidence that the government’s policy of forbearance is having an impact.

This policy forces lenders to look at every possible solution with the borrower before taking action to repossess. This means that in many cases which previously would have seen the lender go straight down the repossession route, other solutions are being found, which is a very positive thing from a treating customers fairly perspective.

The most successful lenders are those that work with third parties to find solutions that work for both the borrower and the lender.

We work closely with lenders to manage their arrears and repossessions and it is apparent that repossession is always the option of last resort which is reflected in the figures.

We help lenders find solutions that best suit them and their customers and would encourage any lenders that have concerns about borrowers to speak to them sooner rather than later in order to look at possible options.

Lenders should try and identify any borrowers who are already having difficulties managing their mortgage or are likely to and take action before repossession becomes the only option.