Home Property Home repossessions plummet to 18-month low

Home repossessions plummet to 18-month low

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9th Aug 12 1:50 pm

Home repossessions dropped to an 18-month low in the second quarter of 2012, new figures show.

According to research from the Council of Mortgage Lenders (CML), the period between April and June saw 8,500 repossessions across the country.

The closing quarter of 2010 marked the last time the overall repossession figure was so low.

The CML had initially forecast that the number of repossessions would increase to 45,000 by the end of 2012. However, it noted that the latest statistics indicate that repossessions are currently on a “lower trajectory” than this.

Despite the more positive nature of the second-quarter figures, a CML spokesman said that the group still believes that by the close of 2012 a rise in repossessions will have been witnessed.

He noted that household budgets remain under pressure, while the economic outlook is still uncertain. As a result of the Bank of England’s weak growth forecasts for the UK economy, the CML also suggested that there is a risk the present stability could be disrupted.

Commenting on the latest set of statistics, CML director general Paul Smee said it appears that borrowers are collaborating with the likes of debt advisers and lenders so that the volume of mortgage repossessions can be kept down.

Smee stated: “Generally, when borrowers prioritise their mortgage commitments, lenders can provide help appropriate to their individual circumstances.

“But success in managing temporary payment problems depends on everyone working together, and it is essential for anyone worried about their mortgage to talk to their lender as soon as possible.”

The CML’s research revealed that the opening half of 2012 saw 18,100 repossessions overall, although – ominously – 28,300 mortgages were seen to have arrears of more than 10% of their balance. This compares to the figure of 28,000 recorded during the previous quarter of the year.

Among its other findings, the CML said 157,400 loans with arrears of 2.5% or more were recorded in the three months to the end of June. While this was 400 down on the opening quarter of 2012, the organisation added that mortgage rate rises hit over one million borrowers in May.

Lenders said they were forced to push up mortgage rates as a result of factors such as rising funding costs and the weak state of the UK economy.

Mortgage approvals have been harder to secure for people with low deposits in recent weeks, as lenders have decided to tighten their borrowing criteria.

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