Repossessions fall to two-year low
The number of repossessions fell to a two-year low during the first quarter of 2010 but many people are still at risk of losing their home, the Council of Mortgage Lenders said today.
Around 9,800 people had their property repossessed during the three months to the end of March, 8% less than during the previous quarter and 26% down on the same period of 2009.
There was also a fall in homeowners who were behind with repayments, with the number of people in arrears of at least 2.5% of their outstanding mortgage dropping to 186,300, 10% less than a year earlier.
The CML said it now expected to revise down its forecast that 53,000 people would lose their homes this year.
It said the prediction 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 who remained vulnerable.
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.
Campbell Robb, chief executive of Shelter, said: "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."
The Government said today that it planned to take a "fresh look" at the schemes to ensure they offered "the best deal for homeowners, as well as value for money for the taxpayer".
It also revealed that at total of 629 families had so far completed the Mortgage Rescue Scheme, under which vulnerable households who are facing repossession can sell some or all of their home to a social landlord and rent it back.
A further 1,849 people are currently going through the scheme and have had the immediate threat of repossession lifted, although the number is still well short of the 5,000 people it was originally intended to help.
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 during the previous three months and 24% down on the same period of 2009.
These led to 14,373 repossession orders being made, 15% less 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.
Ed Stansfield, chief property economist at Capital Economics, said: "The modest improvement in the labour market seen in the final months of last year appears to have helped reduce further the number of mortgage possessions and cases of mortgage arrears."
But Howard Archer, chief UK and European economist at IHS Global Insight, said: "A significant number of homeowners are still at risk despite the fact that the economy is now growing again.
"There will also be a lagged impact from the recession as likely only slow recovery will mean that many people who have lost their jobs will be unemployed for a long time and this will weigh heavily on their finances."
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