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Mixed news on home repossessions

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by Jan Harris
Mixed news on home repossessions

The number of property repossessions increased slightly to 9,200 in the third quarter from 9,100 in the second quarter.

However, the Council of Mortgage Lenders (CML) expects the total number of UK homes repossessed this year to be less than feared.

The organisation believes that a number of factors are helping to minimise home repossessions including low interest rates, the provision of debt management advice, effective arrears management, and co-operation between lenders and borrowers.

Although households budget are being squeezed in the current economic climate, the number of households with mortgage arrears of 2.5 per cent or more of the outstanding balance fell 2 per cent during the third quarter to 161,600, representing 1.44 per cent of all home loans.

However this figure could increase in the face of the increasing cost of living and rising unemployment.

In total, 27,500 UK homes have been repossessed in 2011, a 4 per cent fall from the 2010 same period, and the CML now believes its estimate of 40,000 property repossessions for the full year was overly pessimistic.

But the CML warned that falling real incomes, rising cost of living, and higher levels of unemployment could push up the number of people facing mortgage arrears in the coming months.

The latest figures from Credit Action, a national money education charity, show that a UK home is repossessed every 15 minutes.

The organisation also revealed that the average UK household is £55,795 in debt, including mortgages, while a UK adult owes around £29,532, including their mortgage.

Credit Action points out that with debt at such a level, people are at increased risk of having their home repossessed.

According to the organisation’s statistics, the total secured lending on dwellings at the end of September 2011 stood at £1,242 billion.

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News posted: November 10, 2011

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