Spike in mortgage arrears as banks repossess more homes

BANKS have stepped up repossessions of residential properties, and the number of people getting into early-stage arrears on their mortgages has risen for the first time in four years.

The number of homes taken into possession was the highest on record in the final quarter of last year, the Central Bank said.

The latest arrears figures show that 23,224 mortgage accounts were in arrears for less than three months at the end of last year. This was up slightly on the previous quarter in 2016.

However, it was the first time since September there had been a rise in the numbers getting into early-stage arrears.

“Accounts in arrears of up to 90 days increased slightly in the fourth quarter of 2016, marking the first increase in this category since end-September 2012,” the Central Bank said.

Experts said it was too early to say if there was a trend of arrears rising again.

But it comes despite pressure on banks from the European Central Bank to tackle mortgage defaults.

The revelation is sure to cause despair among policymakers after persistent efforts to get arrears levels down.

The Government recently radically restructured the personal insolvency regime to encourage more heavily indebted consumers to use it.

Data produced by the regulators for the last three months of last year also showed that banks repossessed 455 residential properties. This was the highest level recorded since the Central Bank started collecting this data. The figures show that most of the properties taken into possession by the banks were voluntarily surrendered. Some 112 properties were repossessed on foot of a court order.

Banks had 1,700 properties in their possession at the end of last year.

Policy analyst with rights group FLAC Paul Joyce said that since 2013 some 28,917 new repossession cases have been brought, and 5,306 family homes have been repossessed.

“We also know a substantial number of cases have been struck out or withdrawn but it is worrying that there is no figure provided for the number of repossession cases currently before circuit court,” he said.

Overall, a total of almost 77,500 residential mortgage accounts are in some form of arrears. It was the 14th quarter in a row of this number declining, but still represents 11pc of all residential mortgages.

Close to 33,500 mortgage accounts are more than two years in arrears.