201504 CM April

Amanda Hulme is a partner in the corporate department of
Addleshaw Goddard LLP.
amanda.hulme@addleshawgoddard.com.
CML ON REPOSSESSIONS AND MARKET TRENDS
THE Council of Mortgage Lenders (CML)
has published figures showing that the
number of homes repossessed in 2014
dropped by 26 percent compared to
2013, and was lower than any time since
2006. Moreover, at the end of 2014 the
number of mortgages in arrears was at
its lowest since 2006. Out of the 21,000
repossessions, 16,100 were on owneroccupied
properties, and 4,900 were on
buy-to-let properties.
The figures also saw fewer mortgages
in arrears at the end of 2014 than at
any time since 2006. 1.05 percent of all
mortgages were in arrears equivalent
to 2.5 percent or more of the mortgage
balance - down from 1.29 percent at the
end of 2013 (and 1.12 percent 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.
The CML notes that the two main
traditional drivers of mortgage difficulty are
income shocks (such as unemployment)
and interest rates. Both factors are
relatively benign at present, assisting
the welcome decline in both arrears and
repossessions, supported by effective
lender practices.
The CML has also published data on
the characteristics of the UK mortgage
lending market, broken down for the
periods of December, the fourth quarter
and annual data for 2014. Residential
lending to homebuyers rose slightly
month-on-month in December totalling
55,600 loans. In contrast, remortgage
activity declined month-on-month in
December with the number of remortgage
loans totaling 22,300.
Overall for 2014, homeowner house
purchases totaled 676,900 loans, up 11
percent on 2013 and the highest annual
lending level since 2007. This meant
£112.7 billion was advanced in total in
2014 for house purchase, up 19 percent
on 2013 and again the highest annual
value since 2007
IN BRIEF ...
LSB MAKES
PRE-ARREARS
RECOMMENDATIONS
THE Lending Standards Board (LSB) has
carried out a review and published its
findings into pre-arrears handling which
makes recommendations to strengthen
the Lending Code. The review assessed
the adequacy of processes and controls
to identify the early warning signs of
financial difficulties. While all firms
sampled provided general advice and
guidance (say via websites/leaflets etc.)
only one took pro-active steps towards
customers in difficulties pre-arrears.
Most activity by firms was reactive where
customers were on the cusp of financial
difficulties. Among the proposals are
a separate pre-arrears section in the
Code to give more prominence to these
requirements with details of general
support to be afforded to customers.
Concrete proposals to revise the Code
are expected in Autumn 2015.
The recognised standard in credit management
www.cicm.com April 2015 27