46,000 homes repossessed in 2009

Repossessions fell 13% to 10,200 in the final three months of 2009, compared to the previous quarter.

The figure, which includes home-owner and buy-to-let mortgage borrowers, was also 2% down on the same period of 2008, according to the Council of Mortgage Lenders (CML).

However, for 2009 as a whole, mortgage lenders possessed around 46,000 homes, up 15% on a year earlier but well below the CML’s forecast of 75,000 at the start of the year.

Turning to arrears, 188,300 mortgages ended 2009 with arrears equivalent to at least 2.5% of the outstanding mortgage balance – 3% more than at the end of 2008 but down 3% on the previous quarter.

The CML comments: “Within the total number of arrears cases, there is a different picture in terms of what seems to be happening among households with lower levels of arrears (where the numbers are improving), and higher levels of arrears (where the numbers are little changed).”

The body continues: “This suggests that at present some borrowers facing only modest difficulties are being helped by low interest rates to get back out of trouble, whereas those with more severe problems may be stabilising their arrears but not recovering from them, and lender forbearance is likely to be a significant factor keeping them in their homes.”

Looking ahead, the CML’s says its current 2010 forecast of 205,000 arrears cases and 53,000 properties taken into possession may be a little pessimistic.

The Council believes that that lower than expected unemployment, low interest rates, lenders’ arrears management policies, and government assistance schemes could be mitigating factors.

However, CML director general, Michael Coogan, cautions: “We are not out of the woods yet – 2010 will still be a challenging year for many borrowers, and some households will inevitably find their finances being squeezed if and when interest rates do eventually rise.”

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