The proportion of borrowers in arrears (0.92 per cent) is at its lowest level for more than a decade, according to new figures from the Council of Mortgage Lenders.
Data from the trade body shows that home-owner mortgage arrears were 1.03 per cent of all loans at the end of 2015, with buy-to-let at a lower rate of 0.31 per cent.
The CML says the number of loans with arrears in the most severe band, representing 10 per cent or more of the mortgage balance, was 23,700 – down from 24,200 at the end of 2014.
At 10,200, the total number of repossessions in 2015 was less than half the number in 2014 – down from 20,900. But the CML says year-on-year comparisons are tricky because a recent court case has caused lenders to review their processes around possessions.
The CML says that fewer than one in 1,000 mortgages ended in repossession in 2015.
In the fourth quarter, there was one repossession per 2,500 mortgages in the buy-to-let market, compared with 1 in 5,000 in the home-owner market.
CML director general Paul Smee says: “Of course it is good news that the levels of mortgage arrears and repossessions remain low and falling.
“But, at the risk of sounding as if we are crying wolf, we would continue to urge all borrowers to plan ahead for a time when the interest rate environment may be less benevolent. Lenders do not wish to see borrowers who are coping currently falling into difficulty if and when rates do eventually rise.”