Repossessions To Fall Below Forecast
Posted on 17th November 2011
Forecasts that there will be 40,000 repossessions this year now look over-egged.
The Council of Mortgage Lenders says that arrears are continuing to fall and that repossession numbers are stable.
Reporting on the third quarter, the CML said the number of properties taken into possession by mortgage lenders was 9,200, fractionally up on 9,100 in the second quarter.
The number of repossessions in the quarter equated to 0.08% of all mortgages. This has been the same for five of the last six quarters, with the exception of Q4 2010, which experienced a typical seasonal dip to 0.07%.
So far this year, a total of 27,500 properties have been taken into possession.
This is 4% fewer than in the same period last year.
There was also a slight fall in the number of households in arrears, according to the CML.
At the end of September, the total number of mortgages with arrears of 2.5% or more of the outstanding balance fell to 161,600 (1.44% of all loans), down 2% from 165,200 (1.47% of all loans) and 8% lower than the 175,100 cases (1.55% of all loans) at the end of September 2010.
Despite these improvements there is still a stock of cases with significant arrears: 27,300 loans have arrears of more than 10% of the outstanding balance.
CML director general Paul Smee said: “The fall in the number of mortgages in arrears, and the stable picture on repossessions, are testament not only to the beneficial effects of low interest rates, but also to effective arrears management, and good communication between lenders, borrowers and debt counselling organisations.
“Against the backdrop of widespread financial uncertainty sweeping both the UK and the wider European economies, it is impossible to be sanguine about the future influences that households may face.
“But lenders will do their utmost to help borrowers keep their homes, whatever pressures emerge. These figures firmly show that repossession does not have to be an inevitable consequence of mortgage arrears.”