Home repossessions at lowest level since 1982: CML

The number of home repossessions fell to their lowest level since 1982 last year, figures from the Council of Mortgage Lenders (CML) show.

Borrowers were aided by low mortgage rates but the CML - which represents banks, building societies and other lenders - warned that customers needed to be ready for a time when they rise.

Households also face a squeeze on real terms incomes as inflation turns higher - after the pound's post-referendum slump pushed up import costs - eating into the value of wages.

The total number of repossessions in 2016 was 7,700, down 25% on the year before, and the lowest for 34 years.

The CML also said the number of mortgages in arrears fell by 7% to 94,100.

Lenders can repossess homes if borrowers are unable to keep up mortgage repayments.

The CML said the timing of some repossessions last year may have been affected by a court case that caused banks and building societies to review their processes.

CML director general Paul Smee said: "It is encouraging to see another improvement in arrears and possessions during a year in which borrowers were clearly helped by the downward trend in mortgage rates.

"But customers do need to be ready for a time when the outlook may not be so benign, with pressure on real incomes increasing and as interest rates begin to move upwards again."

The Bank of England's base interest rate has been at an historic low since being slashed at the height of the financial crisis and was cut further to 0.25% after the Brexit vote.

But the robust response of the economy to the referendum result has prompted one of the Bank's rate-setting officials, Kristin Forbes, to suggest an increase could come soon.

The CML figures come as the latest survey from the Royal Institution of Chartered Surveyors (RICS) showed the housing market remained under pressure from a lack of supply.

Surveyors expect rental prices to surge by 25% over the next five years, outpacing house price growth of 20% - with both increases ahead of wages, making affordability even tougher.