Mortgage defaults plummet to 1980s levels
Thursday 29 July 1999
Rising house prices and lower interest rates have lifted thousands of indebted homebuyers out of negative equity, the Council of Mortgage Lenders said.
The number of homes repossessed by building societies and other mortgage lenders in the first half of the year fell by 5 per cent compared with a year ago.
There were 16,410 repossessions in the first half of this year, compared with 16,510 at the end of 1998 and 17,310 at the end of June 1998.
This was the lowest half-year level since the last six months of 1989 when 8,500 homes were repossessed. Repossessions hit a peak of 38,930 in 1991.
In terms of mortgage arrears, the number of people more than 12 months in arrears fell slightly to 34,470 in the first half of the year to its lowest level since 1990.
Arrears cases of 6-12 months fell by 7 per cent to 68,670, from 74,040 at the end of 1998 and the lowest since 1989.
Michael Coogan, the CML's director general, said the recovery in the economy, combined with falling interest rates, had helped cut the number of people behind on their mortgage.
"Rising house prices in some areas of the country also provide greater opportunities for borrowers to trade out of difficulties if necessary," he said.
"However, there is still a tranche of borrowers suffering more serious repayment difficulties and a longer-term loss of income for various reasons."
He said that this was reflected the smaller reduction in longer-term arrears cases, and also in the level of possessions which remained stable.
He added: "The CML expects the number of arrears and possessions to continue to remain steady through the course of 1999.
"However, there is no room for complacency. Changes of circumstances can strike households at any time."
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