Some 46,000 British homes were repossessed last year, but both repossessions and the number of mortgages in arrears fell in the first quarter of 2010, the Council of Mortgage Lenders (CML) said yesterday.
The first three months of the year saw repossessions drop to the lowest level in two years. Some 9,800 homes were taken back by lenders from January to March, down from 10,600 in the previous quarter and 13,200 in the first quarter of 2009. And the number of loans in arrears stood at 186,300 at the end of March, compared with 196,400 at the end of last year and a whopping 206,800 at the end of the first quarter of 2009.
Despite the improvements, the CML advises caution, noting that improvements were most marked among the lower arrears bands, rather than those with more substantial arrears. This suggests that low interest rates are helping keep households out of new difficulties, but that those who are already struggling continue to do so.
So far, the CML is loath to revise its full-year forecasts, given the background of "significant economic uncertainty" and looming public spending cuts. If the current trend continues, the group's original prediction of 53,000 repossessions this year will prove pessimistic, the CML said yesterday. But higher interest rates or rising unemployment risk tipping struggling households over the edge and exacerbating the troubles of those already in arrears.
"We hope and expect to be able to revise down our 53,000 forecast for repossessions in 2010, but we are acutely conscious of the beneficial influence that low interest rates and the package of support have played so far," said Michael Coogan, the director general of the CML.
"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."Reuse content