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Repossessions at their lowest rate since 2006

Repossessions fell 26% in 2014 compared to the year before with just 21,000 homes repossessed, the lowest number since 2006 according to the Council of Mortgage Lenders (CML).

The repossession rate at 0.19% was the lower than any period since 2006. Of the 21,000 repossessions, 16,100 were on owner-occupied properties and 4,900 were on buy-to-let properties.

Paul Smee, CML director general, said: "The relatively low rate of repossession among owner-occupiers - around 1 in 600 mortgages last year - should help to reassure borrowers that, if they do face payment difficulties, lenders will work with them to try to resolve their problems. Repossession is only ever a last resort.

"No-one should be lulled into a false sense of security that the current low interest rates we are experiencing will last forever. Rules are now in place to ensure lenders assess future affordability, but these are not a substitute for careful borrowing. It's essential for borrowers themselves to have one eye on the future. Think through any borrowing taken on now to ensure it will still be affordable if and when rates rise."

At 0.3%, the repossession rate on buy-to-let mortgages was higher than the 0.17% on owner-occupier loans, despite the fact that the underlying arrears rate was lower on buy-to-let lending than on home-owner lending.

There were also fewer mortgages in arrears at the end of 2014 than at any time since 2006, with just 1.05% of all mortgages in arrears, down from 1.29% at the end of 2013 (and 1.12% at the end of the third quarter of 2014). In numerical terms, this equates to 116,800 loans - down from 124,400 at the end of the third quarter, and 144,600 at the end of 2013.

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