Home repossessions fall to lowest level in 1.5 years

 

The number of home repossessions has fallen to its lowest level in a year-and-a-half despite the toughening economy, lenders said today.

There were 8,500 repossessions between April and June this year, marking the lowest quarterly total since the last three months of 2010, the Council of Mortgage Lenders (CML) said.

The CML said the figures indicate that repossessions are so far on a “lower trajectory” than its previous forecast that they will rise to 45,000 by the end of the year.

But it warned that the stable pattern could still be disrupted amid the Bank of England's weak forecasts for economic growth.

A spokesman for the CML said the body is maintaining its previous prediction that repossessions will increase by the end of this year, as the “uncertain backdrop” of the wider economy remains and household finances are still under intense pressure amid high unemployment and low wage increases.

There were 18,100 repossessions in the first six months of this year, a figure which is less than half of the total predicted by the CML for the whole of 2012.

But the number of borrowers with high levels of arrears has been creeping up, which is a position they will find it quite difficult to recover from, the CML spokesman said.

There were 28,300 mortgages with arrears of more than 10 per cent of the balance, an increase from 28,000 during the previous quarter.

The number of mortgages in arrears generally remained broadly flat in the second quarter, the figures showed.

By the end of June, the number of loans with arrears of 2.5 per cent or more of the outstanding balance stood at 157,400, a figure which is 400 lower than three months earlier.

More than a million home owners saw their mortgage rates rise in May, following a string of increases announced by lenders, blaming the weak economy and the increased funding costs.

Lenders have also been tightening their borrowing criteria in recent months, causing a drop in the proportion of mortgage approvals, making it tougher for people to get a mortgage or switch to a cheaper deal.

The body, whose members include banks and building societies, has said that lenders' forbearance has helped to ease the situation, with some reducing rates temporarily, as well as extending payment dates.

The CML's director general Paul Smee said: “The figures show that lenders, borrowers and debt advisers are working together to get through the current period of economic difficulty and keep mortgage possessions in check.

”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 Ministry of Justice also released figures for the number of mortgage repossession actions started by lenders in the courts in England and Wales, which dropped by 8 per cent on the previous quarter, with 15,050 claims issued between April and June.

The MoJ said there has been a downward trend since 2008, coinciding with low interest rates and a pro-active approach by lenders to help those who are struggling.

There was also an 8 per cent fall in the number of repossession orders made compared with the previous quarter, bringing the figure to 11,642.

Housing Minister Grant Shapps said: “Repossession is a frightening prospect for any homeowner, and this Government has worked hard to help keep the pressure off by tackling the deficit and keeping interest rates at a record low.

”In these tough economic times, it's good to know that the protections in place are preventing the worst for many families. But while repossessions remain lower than anticipated, there's no room to be complacent.

“The advice and financial support is in place to prevent anyone from reaching that last resort measure of repossession. I would urge anyone feeling the pinch to take advantage, and seek help as soon as possible.”

PA

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Tax Assistant

Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

Recruitment Genius: Outbound Sales Executive - OTE £25,000

£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Java Developer / J2EE Developer - Watford - £45,000 - £47,000

£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...

Ashdown Group: Marketing Product Manager - (Financial Services) - SW London

£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Day In a Page

Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project
Diana Krall: The jazz singer on being friends with Elton John, outer space and skiing in Dubai

Diana Krall interview

The jazz singer on being friends with Elton John, outer space and skiing in Dubai
Pinstriped for action: A glimpse of what the very rich man will be wearing this winter

Pinstriped for action

A glimpse of what the very rich man will be wearing this winter
Russell T Davies & Ben Cook: 'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'

Russell T Davies & Ben Cook: How we met

'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'
Bill Granger recipes: Our chef serves up his favourite Japanese dishes

Bill Granger's Japanese recipes

Stock up on mirin, soy and miso and you have the makings of everyday Japanese cuisine
Michael Calvin: How we need more Eric Cantonas to knock some sense into us

Michael Calvin's Last Word

How we need more Eric Cantonas to knock some sense into us