House repossessions up by 15%

Council of Mortgage Lenders says house repossessions shot up in the last quarter but remain 10% lower than last year The number of UK homes repossessed by mortgage lenders rocketed by 15% to 9,100 in the first quarter of 2011, according to latest figures from the Council of Mortgage Lenders (CML). The figure is well up on the 7,900 homes repossessed in the final quarter of 2010, but is 10% lower than the same period last year and equal to the average quarterly number of repossessions throughout 2010. The number of mortgages with arrears equivalent to 2.5% or more of the outstanding balance fell to 166,900 from 170,000 last quarter, and represent 1.47% of the 11.3m outstanding first-charge (original) loans. But the number of arrears exceeding 10% of the mortgage balance increased slightly from 27,400 at the end of 2010 to 27,700. Howard Archer, chief economist at IHS Global Insight , said the quarterly rise in repossessions “highlights the fact that a significant number of homeowners are at risk, particularly if economic activity is muted and unemployment moves over the coming months as tighter fiscal policy bites. “Any rise in interest rates would be liable to send a significant number of financially stretched people over the edge.” David Birne, an insolvency practitioner at HW Fisher & Company chartered accountants, agreed: “The main reason the figures aren’t worse is the breathing space afforded to homeowners by the ongoing low interest rate environment. When this comes to an end it will be the end of the road for many overstretched households. “Throw further public sector job cuts, a stagnant economy and the soaring cost of living into the mix and there is every reason to believe arrears and repossessions will spike towards the end of the year and on into 2012.” Housing minister Grant Shapps said the figures “underline how the recession has brought difficult times for lots of people” and the government will “continue our efforts to tackle the record deficit to avoid the need for rapid increases in interest rates and keep the pressure off already stretched family budgets”. The CML’s director general, Michael Coogan, said the financial position of many households is “likely to be stretched for some while, and some will inevitably find themselves in difficulty”. He said lenders have a range of options to nurse borrowers through temporary problems and, if in doubt, consumers should “talk to their lender as they will want to help”, and take advice from Shelter , Citizens Advice or the National Debtline (0808 808 4000). The Mortgage Rescue scheme , introduced in January 2009, helped 5,039 households receive help and advice from their local authority in the first three months of 2011, but only 2,621 homeowners have completed the full process since the scheme’s launch. Repossessions Mortgage arrears Mortgages Property Borrowing & debt Housing market Mark King guardian.co.uk

Posted by on May 12, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.