Number of home repossessions falls

For sale signsHome repossessions have fallen to their lowest level since 2007, despite the continued weakness of the economy, lenders have said.

A total of 8,200 properties were repossessed in the third quarter of this year, down from 8,500 over the summer and marking the lowest number of repossessions seen in a single quarter since 2007, said the Council of Mortgage Lenders (CML).
The figures indicate that the overall number of repossessions this year will be way below the CML's previous forecast that the numbers could rise to 45,000 by the end of 2012.

There have been 26,300 repossessions this year so far, showing an 8% drop on the same period a year ago.

CML director general Paul Smee said: "Good communication and effective arrears management by borrowers, lenders and money advisers are helping the vast majority of those with mortgage repayment problems. The rate of repossession has continued to fall and it's clear that lenders want to keep people in their homes."

A spokesman for the CML said the body is likely to make a revised repossession forecast next month and, given the latest figures, the CML now expects the total for 2012 to come in below its original estimate.

"We expect it will fall below that amount, but we will be having another look in mid-December," he said.

The CML has previously warned that although repossessions have remained stable, the pattern could still be disrupted amid the difficult economy.

A string of lenders have raised their standard variable rates since the spring, meaning that more than a million borrowers are now dealing with higher mortgage costs. Soaring energy bills and rising food costs will also place more pressure on families as winter sets in.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: "Some borrowers are still struggling to afford their mortgage as living costs continue to rise and many lose their jobs. Lenders must continue to show forbearance and look after customers who are struggling by letting them switch to interest only, take payment holidays or extend their mortgage terms."
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