Boarded up houses
A mortgage possession claim when a borrower falls into arrears can lead to the repossession of their home Reuters

The number of troubled mortgage borrowers in Britain who have been hit by possession claims from lenders has slumped to its lowest quarterly figure recorded in a decade, according to a report from the Ministry of Justice (MoJ).

This is off the back of low interest rates keeping repayment costs down, a recovering economy and greater forbearance from lenders for borrowers in difficulty.

MoJ figures show there were 10,776 mortgage possession claims – which can lead to those in arrears losing their homes – in the second quarter of 2014, the lowest since 2003.

And the MoJ said the number of mortgage possession claims in County Courts increased from 62,862 in 2002 to a peak of 142,741 in 2008. Since then it has fallen 62% to 53,659 in 2013.

The UK economy is set to grow by 3% in 2014, the fastest rate of any developed Western country.

Meanwhile, the Bank of England is continuing to hold its base rate at the record-low 0.5% as wages and productivity remain weak, despite the broader economic recovery and robust headline employment data.

This has kept a lid on mortgage repayment costs, easing the debt burden for many households as they struggle through a period of falling incomes.

The office for National Statistics (ONS) data shows wages rising by 0.7%, but price inflation at 1.9% as the cost of living rushes ahead of pay growth.

"For over half a decade, our national aspiration to own our own homes has struggled in the face of the longest economic crisis on record," said David Newnes, director of estate agents Reeds Rains and Your Move, part of LSL Property Services.

"Certainly, some households succumbed to the wave of unemployment that followed the 2008 crisis, and as the broader monthly squeeze tightened its grip.

"But now as the jobs market gradually comes back to life, the effect on the most hard-pressed of households is clear to be seen.

"While wages are yet to pick up significantly, those in the most serious financial problems often face a lack of any earnings at all. So as the risk of unemployment retreats this year, those ... most at risk from losing their homes are benefiting the most."