Repossessions continue to fall, while the number of borrowers in arrears has also declined, according to data out on the first quarter of the year from the Council of Mortgage Lenders. This is not altogether surprising with rock-bottom interest rates and improving employment numbers, as well as lenders prepared to be flexible and show forbearance.
However, there are still thousands of homeowners being repossessed each year, which begs the question: what will happen when interest rates do start to rise? How will people cope? Even though we have had a benign interest rate environment for some years now, there are likely to be people whose finances are teetering on a knife edge and rate rises could easily push them over.
Interest rate rises are inevitable at some point; when they come, they must do so gradually. Thankfully the Bank of England has suggested that this will be the case.
Nevertheless, borrowers must keep their lender in the loop if they are struggling with their mortgage. It is much easier and less stressful to come up with solutions early on than further down the line when the options may be much more limited.