BSA and FSA Report a Decrease in Mortgage Arrears

According to the information revealed by the Financial Services Authority (FSA) and the Building Societies Association (BSA), the number of UK residents who have taken out a residential mortgage and fell into arrears has been steadily decreasing as only 3% of borrowers now face property repossession.

The results of the research, carried out by the Building Societies Association among UK borrowers, demonstrate that 97% of those who fell into arrears in the past 2 years did not face repossession of their house or apartment as they have either repaid or are now repaying the arrears.
The BSA published the results of its research right after the FSA reported a stable decline in mortgage arrears, which started in the 4th quarter of 2008. According to the FSA, the number of mortgage arrears fell from 68,000 in the last 3 months of 2008 to 51,000 in the 2nd quarter of 2009.
As for the BSA, in the framework of its research, it questioned 451 UK borrowers who fell into mortgage arrears in the past 2 years. More than 30% of those polled said that they have fully repaid their arrears, more than 40% said they are still in the process of repaying the mortgage arrears, and 12% said they have already negotiated a new repayment plan with their lender but has not yet made any repayments. Only a mere 3% of borrowers in arrears faced property repossession.
In the opinion of Mr. Paul Broadhead, who takes the post of head of mortgage policy at the Building Societies Association, it is highly important to contact the lender in a timely manner should a borrower encounter any financial difficulties, which might lead to arrears. He added that most of the time lenders attempt to negotiate all possible measures to help the borrower avoid mortgage arrears or repossession.
One of the other important findings reflected in the BSA research was the major cause of arrears in the UK. As a general rule, that was loss of income or job.