Repossession up but new arrears decline

New data from the Financial Services Authority (FSA) show the number of homes being taken back by lenders rising 3% to 13,987 in the third quarter of 2009, compared with the previous three months.

However, repossession levels have remained fairly flat in recent months and the figure is almost 6% below the January to March level.

Meanwhile, the number of mortgage borrowers newly in arrears of more than 1.5% of their outstanding loan fell during the three months to the end of September, to 46,000.

The proportion had also declined 10% on the previous three months and 30% from its end-2008 peak.

Last month, The Council of Mortgage Lenders (CML) cut its forecast for the number of repossessions in 2009 to 48,000.

The estimate was substantially down on earlier forecasts of 75,000 in 2008 and 65,000 in June of this year.

The body said the improvement reflects “lender forbearance, government measures and the beneficial effect of continuing low interest rates”.

In further good news, CML figures showed that at the end of September, 194,600 home loans (1.77% of all UK residential mortgages) were in arrears of 2.5% or more of the outstanding balance.

The result compares with 204,200 mortgages in arrears on the same basis at the end of June, or 1.86% of all mortgages.

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