Repossessions fall to two-year low

The number of people who had their homes repossessed fell to a two-year low during the first quarter of the year, figures showed today.

Around 9,800 people lost their homes during the three months to the end of March, 8% fewer than during the previous quarter and 26% below the figure for the same period of 2009, according to the Council of Mortgage Lenders.

There was also a fall in the number of people in mortgage arrears, as low interest rates helped homeowners keep up with repayments.

The CML said that, while it remained cautious, it expected to revise its forecast for repossessions for the whole of 2010 later in the summer.

It said its prediction that 53,000 people would lose their homes this year looked "pessimistic" if the current level of government support continued, interest rates did not rise and there were no new economic shocks.

But it warned that the decline in repossessions should not cause complacency, as there were a large number of households who were only just coping and remained vulnerable.

CML director-general Michael Coogan said: "With all eyes on the new Government and what steps it will take to address the fiscal deficit, we cannot emphasise too strongly the importance of continuing to fund the support mechanisms that are proving effective in containing mortgage arrears and repossessions."

The group has joined forces with housing charity Shelter and Citizens Advice to write to the new Chancellor, George Osborne, urging him to extend the current support available to households in the greatest financial difficulty in his first Budget.

Around 2.38% of people with a mortgage had fallen into arrears of at least 2.5% of their outstanding mortgage at the end of March.

Overall, 186,300 homeowners were in arrears of this level, 5% fewer than at the end of 2009 and 10% down on a year earlier.

But the group said the drop in the number of people who were behind with repayments was more marked in the lower arrears bands than among those who had fallen significantly behind.

It said this suggested that low interest rates and relatively stable employment was helping prevent new households from getting into difficulties, but that many people with more entrenched problems were struggling to get back on their feet.

Despite the fall in the number of repossessions, the proportion of mortgaged properties that were taken back by lenders remained unchanged compared with the previous quarter at 0.09%, although this was down from 0.12% a year earlier.

The Ministry of Justice also released figures today which showed a fall in the number of repossession orders made by courts in England and Wales.

A total of 18,504 repossession claims were issued during the first quarter, on a seasonally adjusted basis, 8% less than the previous quarter and 24% down on the same period of 2009.

These led to 14,373 repossession orders being made, 15% fewer than a year earlier, of which 46% were suspended.

The ongoing fall is likely to be driven in part by the introduction of the pre-action protocol in November 2008, under which courts can grant a repossession order only if all other measures to keep someone in their home have failed.

Campbell Robb, chief executive of Shelter, said: "Hundreds of thousands of homeowners desperately need the new Government to continue the help that enables them to keep their home.

"Current support schemes in place are set to wind up at the end of the year but could be pulled at any time, which will leave many people with no safety net and facing the real possibility of repossession.

"If the funding for these schemes is not urgently reconfirmed, the new Government are likely to see a huge number of people losing their home by the end of the year."