The number of short-term mortgage arrears increased slightly in the second half of last year and rose for the first time since 1998, according to the latest figures from he Council of Mortgage Lenders.
One in every 220 mortgage cases showed short-term mortgage arrears of between 3-6 months, in the last six months of 2004, rising from 49,720 in the first half of 2004 to 53,960 in H2 2004, but the number of repossessions and long-term mortgage arrears are still generally flat.
The CML recognizes the rise in arrears is still around one-quarter of the number of arrears experienced when the body first began compiling data in 1994 and there were then 190,000 cases in H1 2004.
While this suggests some residential property owners may be struggling under the current economic conditions as a result of higher interest rates, says the CML, the number of repossessions still stands at 3,070 properties, less than the 3,160 recorded in the first half of 2004 and 3,610 in the second half of 2003.
The number of long-term mortgage arrears cases is also flat, having fallen by just 330 cases in the previous six months to 38,130, says CML director general Michael Coogan.
"The number of properties taken into possession in the second half of 2004 was the lowest since 1982. But with short term-arrears now increasing, we are bound to see a rise in longer-term arrears and possessions following behind, although we do not expect a dramatic increase.
"Anyone facing financial difficulties should talk to their lender as soon as possible. Lenders try to treat arrears as sympathetically as they can - and the sooner borrowers seek assistance, the more likely it is that lenders will be able to help."IFAonline
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