Repossession levels below expectations

13/11/2009

Fewer homeowners could be seeking repossession advice this year than previously thought thanks to the beneficial effects of low interest rates.

This is according to the Council of Mortgage Lenders (CML), which has cut its forecast of the number of repossessions this year to 48,000, with lender forbearance and steps taken by the government also having an influence.

The CML originally predicted that 75,000 repossessions would take place in 2009, although this estimate was reduced to 65,000 in June.

CML director Michael Coogan said the organisation is "glad to be wrong" on its original mortgage repossessions forecast.

"Low interest rates, and lenders' forbearance policies, have helped to cushion many households facing financial problems," he explained.

"And although the economy is not out of the woods yet, we no longer expect a dramatic rise in properties being taken into possession unless interest rates rise from the low levels that most commentators now expect to persist for some time."

Paragon Mortgages recently announced that mortgage arrears had fallen for the second quarter in succession.

Kevin Still, director of EuroDebt, commented: "It is encouraging that the levels of serious mortgage arrears have reduced as well as the number of repossessions. We hope that many people are using reduced interest rates to clear arrears and reprioritise their expenditure to ensure that their home is not put at risk.

"Lenders seem to responding to the challenge of treating customers with genuine financial difficulties more fairly. The Ministry of Justice has also confirmed that the number of property possession orders made in the UK amounted to 17,134 in the third quarter of the year, 35 per cent down on a year earlier.

"These figures don't mean that we are out of the woods, as dealing with priority arrears is just the beginning and many still have serious problems dealing with unmanageable unsecured debts."

Tags; Housing Debt and Bills,

• Share
• 
• 
• Store
• 
• Follow
•