CML reports further fall in repossessions

| February 10, 2011 | 0 Comments
CML reports further fall in repossessions

The Council of Mortgage Lenders (CML) has today reported a further fall in repossessions – the fifth consecutive quarter in which they have fallen.

According to the Council, lenders seized 7,900 properties in the October to December period - an 11% fall from the 8,900 in the previous quarter.

It was also 26% lower than the same period a year earlier.

Experts argue, though, that many homeowners have been saved from repossession, due to historically low interest rates, which drove monthly mortgage repayments down.

The Bank of England is today expected to keep interest rates at the low of 0.5% - where they have been since March 2009.

However, according to some economists, there could be a shock on the way as the Bank of England has come under pressure to lift rates to combat stubbornly high inflation.

Whether or not rates are increased today, business groups including the CBI and the NIESR expect three interest rate rises this year.

As a result, the CML warned that the falling trend could reverse as not all householders are in a position to cope with any future hikes in interest rates.

Michael Coogan, director general of the Council, comments: “As we go through 2011, the number of people facing payment pressures may increase if interest rates rise, and as a result of the spending cuts that have resulted in reductions in the level of public support available.”

The Council is forecasting that 40,000 families will have their homes repossessed during the 2011 year, while 180,000 mortgages will be in arrears.

In the meantime, there were 1.49% of mortgages with 2.5% or more of arrears at the end of the fourth quarter - this represented the lowest since the third quarter of 2008.

In related news, a report last month from housing charity, Shelter, revealed that in the last year, 2.6 million Britons have paid their mortgage or rent on their credit card.

The figure represents a rise of 50% on the previous year and reveals the extraordinary lengths some are going to in order to keep a roof over their head.

The charity has previously warned families about the dangers of using credit cards to make repayments on their mortgage or rent and is urging people struggling with their repayments to seek expert advice immediately.

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