Repossessions increase by 6,400


​%VIRTUAL-SkimlinksPromo%The number of people having their homes repossessed has lifted for the first time in a year, figures released by banks and building societies show.

Some 6,400 repossessions took place in the first quarter of 2014, a 4.9% increase compared with the fourth quarter of 2013, which had seen the lowest quarterly total since the Council of Mortgage Lenders' (CML) records began in 2008.
The last time the figures increased on the previous three months was in the first quarter of 2013, although the CML said repossessions are still down by 20% in the first quarter of this year compared with the 8,000 during same period a year ago.

The CML said it is "usual" for repossessions to edge up at the start of the year. This could partly be due to households in financial difficulty trying to struggle on through Christmas.

The figures also show that the number of mortgages where home-owners have fallen into arrears of more than 2.5% of the mortgage balance has fallen to its lowest levels since spring 2008.

Some 138,200 home loans, representing 1.24% of all mortgages, are in this level of arrears, representing a 4.4% drop on the previous quarter.

The number of mortgages in arrears has also fallen in the most serious bracket, with the latest quarterly figures showing that 27,800 home loans, or one in every 400 mortgages, have arrears of 10% or more of the mortgage balance.

Some 28,900 repossessions took place across the whole of last year, marking the lowest annual number seen in figures released by the CML since 2007.

A spokesman for the CML said the body stands by a previous prediction for repossession numbers this year and it still expects the total to sit at around 28,000 for the whole of 2014.

CML director general Paul Smee said: "The downward trend in the number of mortgages in arrears or ending in repossession is obviously very welcome. Repossession is absolutely the last resort - the aim is to
keep people in their home and get their finances back on track wherever possible.

"Lenders fully recognise that behind the numbers, these are real households, with differing circumstances.

"Lenders try to ensure that all borrowers are treated fairly and sensitively. They continue to improve their practices to try to achieve the best outcomes when payment problems do occur. Combined with low interest rates and an improving jobs market, these strategies are clearly helping many households."

Separate figures released today by the Ministry of Justice (MoJ) showed that the number of mortgage possession claims in county courts across England and Wales fell to 12,704 between January and March this year, marking the lowest quarterly figure seen in a decade.

The MoJ said that a fall in the number of mortgage possession claims in courts since 2008 coincides with lower interest rates, a proactive approach from lenders in managing people in financial difficulties and government interventions such as the Mortgage Rescue Scheme.

A mortgage lending clampdown came into force last month, which mean that people applying for a mortgage now face more probing questions about their spending habits to work out whether or not they can afford their repayments.

Lenders also have to apply "stress tests" to make sure that the applicant could still afford their home loan as and when interest rates rise.

But concerns have also been growing that the sharp pace of house price growth in some areas could encourage some people to really try to stretch their borrowing.

This has fuelled speculation that the Bank of England could step in and impose measures to calm the market.

The people who affect house prices
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Repossessions increase by 6,400

They have the power to push a price higher, depending on how many other people are in the running for a home and how liberal they want to be with the truth to the buyers. In some cases, they can also do more harm than good by initially overvaluing a property. The worst case scenario is the home eventually sells for less than it would have done had it been priced realistically in the first place.

Sometimes a quick-moving solicitor can be the difference between getting the home at the price you want and getting into a bidding war or missing out entirely. If the buyer needs a quick sale, they're more likely to do a deal with someone who has a flexible solicitor who can push through the sale so it suits them.

Research by Halifax concluded that anti-social neighbours could take £31,000 off the price of an average home. If you’re selling, you should declare any problems you’ve had on a Seller’s Property Information Form, otherwise you could face a claim later on.

While an increase in Council Tax might not be too much of a deterrent to a potential buyer, plans to grant permission for new homes, a mobile phone mast or wind turbines could knock an asking price down. If you're a buyer, the local council should have details of any future planning applications and you can search them for a small fee.

A lot of traffic in an area obviously has an effect on air quality. Since 1997 each local authority in the UK has carried out studies of the air quality in its area. If an area falls below a national benchmark for air quality, it has to be declared an Air Quality Management Area (AQMA). Some residents of the Llandaff area of Cardiff expressed concern that it had become an AQMA due to an increase in traffic in the area. Whether this becomes a widespread issue remains to be seen.

Mortgage availability is a key driver of property prices. If no-one can take out a mortgage, then prices will stall and eventually fall. We've seen this happen in parts of the UK in recent years, as lenders tightened up their criteria following the credit crunch. Conversely, good mortgage availability will mean more people are competing for properties - to a seller's advantage if their home is desirable.

An outstanding local school can add around 8% to the value of a home, according to the Royal Institution of Chartered Surveyors. On the flipside, a not so good Ofsted report can take off a similar amount. If you’re concerned about a school’s performance, one way to get involved is to become a governor.

Initiatives such as the Help To Buy scheme have been credited with pushing house prices up. A buoyant economy with strong employment gives people the confidence to buy and leads to an upward shift in house prices, while rises in unemployment have the reverse effect. Planning restrictions, at both a national and local government level, affect the number of homes in a particular area.


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