Fewer U.K. mortgage holders failed to make repayments on their home loans in the first quarter as low interest rates and the economic recovery eased Britons’ financial problems, the Financial Services Authority said.
About a third less mortgage holders fell into arrears in the three months compared with the same period of 2009, with the number of new cases falling to 40,500, the U.K.’s London-based financial watchdog said in an e-mailed report today. Total loans in arrears fell 9 percent from a year earlier to 361,800.
The Bank of England has kept its benchmark interest rate at a record low since March 2009 to kick-start economic growth after the worst recession on record. Unemployment fell in the quarter through April, while Bank of England policy maker Andrew Sentance said in an article in the Sunday Times on June 13 that growth was “gaining momentum.”
From the previous quarter, total loans in arrears fell 4 percent in the three months through March, while the number of new arrears slipped 2 percent.
The total loans in arrears represent 3.23 percent of all mortgage loans, the authority said. This has fallen for three consecutive quarters and compares with a peak of 3.65 percent in the second quarter of 2009, it said.
To contact the reporter on this story: Svenja O’Donnell in London at email@example.com
To contact the editor responsible for this story: John Fraher at firstname.lastname@example.org