The Council of Mortgage Lenders (CML) have released data showing the number of homeowners losing their house is down 26% in the last year.

Over the past year there has been a significant decrease in the number of home repossessions reducing 26% to 21,000 in 2014 down from 28,900 in 2013.

From the 21,000 homes repossessed 16,100 were owner occupiers and 4,900 are buy-to-let landlords and percentage of 0.19% is the lowest level that at any time since 2006.

For buy-to-let mortgages the figure is higher at 0.3% compared to 0.17% for owner occupiers as lenders provide more help during financial difficulty do they do not lose their home.

Whether you are a first time buyer or home mover ensuring you can afford the mortgage is important to avoid missing monthly payments in the future.

Fewer mortgages in arrears

There were fewer mortgages in arrears at the end of 2014 than at any other time since 2006, this being 1.05% of all loans down from 1.29% a year earlier.

A total of 116,800 mortgage loans were in arrears at the end of 2014 down from 124,400 at the end of the third quarter and this compares to 144,600 at the end of 2013.

CML data also measures the number of mortgage arrears as a percentage of the balance of the loan, such as 5% or more than 10% and all these bands reduced year-on-year.

The fall is driven by economic factors such as employment is falling, low interest rates and lenders introducing more competitive mortgage rates.

However, the CML and lenders are aware that interest rates will rise increasing pressure on household finances including first time buyers, home movers, remortgage buyers and buy-to-let landlords.

Older remortgage buyers are often forced to repay their loan at a certain age and rather than downsizing, the equity release buyer can agree a lifetime mortgage.

Homeowners still need to be cautious

Director general of the CML, Paul Smee, said that the low level of repossessions for owner-occupiers of about 1 in 600 mortgages last year should show homeowners that this action is a last resort.

Borrowers should be reassured that if homeowners face difficulties with making payments, lenders are willing to work with them to resolve their financial problems.

The mortgage market review (MMR) introduced rules to assess affordability for first time buyers, home movers and switching remortgage buyers with lenders taking into account income and outgoings such as child care, holidays and living costs.

Even so, borrowers should be careful not to overextend themselves and make sure they can afford their mortgage when rates rise.

What are your next steps?

Talk to our London City Mortgage brokers for advice if you remortgage your existing home and want the best mortgage deal or release capital, buying your first home, moving home or are a buy-to-let investor.

For older homeowners releasing equity from your property, our LCM mortgage advisers can recommend the lifetime mortgage, accessing wealth to consolidate debt, maintain your lifestyle or even buy a more expensive home.

Start with a free mortgage quote or call us and we can take your details. Learn more by using the equity release calculator, mortgage costs calculators, and property value tracker chart.

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