Mortgage arrears levels have fallen by almost a fifth (19 per cent) in the last year, according to Department of Finance data which puts the number of troubled residential properties at 65,458.

The figures relate to “primary dwelling homes”, of which 90 per cent are now functioning healthily with no arrears.

The department’s monthly mortgage restructures data report analyses mortgages held by the six main lenders.

The report for the year to May 2016 also found that the number of mortgages in arrears for more than 720 days (26,109) have fallen for a 13th consecutive month.

In the last two years, the total number of home mortgages experiencing repayment problems has fallen by 38 per cent from almost 106,000.

Buy-to-let

The data for May also looked at mortgages for the buy-to-let sector where troubled loans have fallen by 21 per cent in the last year to 21,610.

There was a 6 per cent increase in the number of restructured loans while accounts in arrears for periods greater than 90 days had declined by 23 per cent.

Addressing the mortgage arrears issue in the Dáil last week, Minister for Finance Michael Noonan stressed the importance of indebted borrowers engaging with lenders as a means to resolution.

How banks respond to troubled home loans is governed by the Code of Conduct on Mortgage Arrears, designed to ensure foreclosures are not forced through aggressively when borrowers get into financial difficulties.

Terms of code

Under the code, lenders must wait eight months from the onset of arrears before commencing legal action.

Homeowners must also be given three months’ notice of any impending litigation.

In June last year, the adoption of the code by seven financial institutions was measured in a Central Bank inspection report.

It found that while frameworks were established, weaknesses in practice were found to exist to varying degrees.

Mr Noonan said the Central Bank continued to engage with these lenders as part of ongoing efforts to enforce the code of conduct.

“The Government attaches great importance to addressing the issue of mortgage arrears and wants to keep families in their homes and avoid repossessions insofar as possible,” he said.