Relief as home repossessions fall

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The Independent Online

The number of people who lost their homes fell during the second quarter of the year despite rising unemployment, figures showed today.

Around 11,400 people had their properties repossessed during the three months to the end of June, 10 per cent fewer than during the previous quarter, according to the Council of Mortgage Lenders.

The group said a combination of factors had helped people who were struggling with their mortgage stay in their home, including low interest rates, increased lender forbearance and a raft of Government schemes.

There was also only a modest increase in the number of people falling behind with repayments, with 205,600 homeowners in arrears of more than 2.5 per cent of their outstanding mortgage debt at the end of June, up from 203,900 at the end of the first quarter. The figure represented 1.85 per cent of outstanding mortgages.

But despite the fall in repossessions, the CML warned that there was no room for complacency over the potential scale of future payment problems.

The group has predicted that 65,000 people will lose their homes during 2009, and it warned today that, with unemployment still rising, both arrears and repossession levels were likely to increase during the second half of the year.

Jackie Bennett, the CML's head of policy, said: "With unemployment rising and the economy still weak, the outlook will remain challenging for the rest of this year and into 2010.

"But today's data shows that lenders are committed to helping borrowers manage their way through temporary payment problems and get their mortgage back on track over time, avoiding possession where possible."

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