Second charge mortgage repossessions down almost 37% in 2016

New figures released today by the Finance & Leasing Association (FLA) show that the number of second charge mortgage repossessions was 144 in 2016, almost 37% lower than in 2015. In the final quarter of 2016, the number of repossessions was 39, up by 18% compared with the same quarter in 2015.

The rate of second-charge mortgage repossessions, as a percentage of average outstanding agreements, has fallen from 0.34% in 2009 to just 0.07% in 2016.

Commenting on the figures, Fiona Hoyle, Head of Consumer and Mortgage Finance at the FLA, said:

“Supporting customers in financial difficulty remains a priority for the second charge mortgage market. This is reflected in the low number of repossessions reported in 2016.

“We expect the number of second charge mortgage repossessions in 2017 to be at a similar level to 2016.”

Commenting on the FLA’s announcement that there has been a further reduction in second charge repossessions, Buster Tolfree, Commercial Director – Mortgages, United Trust Bank said:

“The fall in second charge repossessions in 2016 to only 0.07% demonstrates that the market is evolving and improving. The positive influence of FCA regulation, MCD and the move to MCoB continues to validate the second charge sector which provides an improved choice for consumers and a viable alternative to remortgaging, especially if customers have an early redemption charge on their first mortgage or are looking to raise additional funds over a different term. Intermediaries are becoming increasingly aware of the benefits of second charges in terms of speed and flexibility and as this grows, so will the market.

“Second charge interest rates are at the lowest levels ever seen and lenders have some extremely competitive offerings. UTB offers tracker rates from +3.9% p.a. and 5 year fixed rates from 5.4% p.a. With current economic conditions suggesting that the Bank of England Base Rate will stay at current levels for at least the near future, this bodes well for new second charge borrowers, the growth of the sector and for continued low levels of second charge defaults and repossessions.”

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