Repossession rise but lag behind lenders’ forecast
The Council of Mortgage Lenders (CML) has reported that repossessions by first-charge mortgage lenders stood at 12,800 during the first quarter of 2009.
The total includes buy-to-let loans but excludes instances where a “receiver of rent” has been appointed as an alternative to repossession.
The figure compares with 10,400 repossessions in the final quarter of 2008, and 8,500 a year earlier.
The number of mortgages in arrears continued to rise, although low interest rates have led to problems in calculating the usual “number of months” measure.
The CML has therefore worked out that the number of loans with arrears of more than 2.5% of the mortgage balance rose to 205,300 in the three months to the end of March, up 12% on the final quarter of 2008 and 62% on the same period of last year.
The body has also made changes to the way in which it compares the rate of arrears and possessions as a proportion of the total stock of mortgages.
No figures are available for the last quarter because so called “legacy loans” (mortgages with a nominal outstanding balance) have been excluded and the Council says it cannot produce consistent data at the moment.
However, CML director general, Michael Coogan, says “it is clear that mortgage arrears continued to increase”.
Turning to repossession, Mr Coogan advises that the 75,000 figure forecast for the whole of 2009 now looks “pessimistic” and will therefore be downwardly revised over the next month or so.
He adds: “Lenders genuinely want to help borrowers where borrowers are committed to working with them. It is quite clear that the number of arrears cases is rising far more markedly than the number of repossessions. Lenders are demonstrably increasing the forbearance they are offering.”
The CML’s members are together responsible for 98% of residential mortgage lending in the UK.