The number of people with homeowner loans in arrears equivalent to more than 2.5 per cent of the overall mortgage balance is expected to fall this year.
Council of Mortgage Lenders (CML) forecasts suggest that there will be 3,200 fewer people in arrears by the end of the year compared to during the three months to June 2010.
The second quarter saw the number of homeowner loans behind on payments fall by five per cent compared to the first three months of the year and by 17 per cent compared to 12 months earlier.
As of the end of June, 178,200 loans were in arrears - and this figure is expected to decline to 175,000 by the end of 2010.
In addition to arrears declining, the number of properties taken into possession also continued to fall in the second quarter.
There were 9,400 repossessions in the three months to the end of June, compared to 9,800 in the first quarter.
However, CML director general Michael Coogan explained that the latest data on arrears and possessions "is far from a healthy all-clear".
He added: "Mortgage difficulties have so far been contained at lower levels than we expected at the start of the year, and by comparison to the 1990s recession.
"We hope the coalition government will not risk undermining the chances of extending the welcome trends this year by removing support mechanisms that work."
The fall in repossessions has been welcomed by the Consumer Credit Counselling Service, although it warns that it expects repossessions to rise over the next year.
Commenting on the data, the charity's chairman Malcolm Hurlston explained that there is little doubt lenders have shown leniency towards debtors by not enforcing possession orders.
However, he added that some lenders are showing reluctance to allow struggling debtors to switch to interest-only mortgages. |
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