Mortgage lenders report fall in home repossessions

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The number of British families losing their homes fell again in the second quarter of the year, and repossession levels are now dramatically lower than last year.

The Council of Mortgage Lenders said yesterday that it had also revised its forecast for repossessions and for mortgages in arrears lower as a consequence of the sustained improvement since last year. However, analysts also warned that there could be a relapse if unemployment rises and the economy enters a "double dip" recession.

A total of 9,400 homes were repossessed during the second quarter of 2010, down 400 from the previous quarter, and 2,400 below the figure for the same period of 2009, according to the Council of Mortgage Lenders (CML).

The figure led the CML to revise its forecast for total repossessions in 2010 as a whole – now 39,000 repossessions for the year, compared with November's estimate of 53,000 and the 47,700 reported in 2009.

The number of mortgage holders behind with their payments also fell. At the end of June there were 178,200 loans with arrears, equivalent to 2.5 per cent or more of their mortgage balance. This was 5 per cent lower than at the end of March, and 17 per cent lower than a year earlier.

The CML is now expecting 175,000 mortgagees to end the year 2.5 per cent or more in arrears, compared with the previous forecast of 205,000.

"While we don't want to cry wolf, it seems obvious that the ongoing prognosis for arrears and possessions is far from a healthy all-clear," said Michael Coogan, the director-general of the CML.

"We hope that the coalition Government will not risk undermining the chances of extending the welcome trends this year by removing support mechanisms that work."