Legal News
CML reports decline in arrears and repossessions
13/08/2010
The number of properties taken into possession by first-charge mortgage lenders continued to fall during the second quarter of 2010, the Council of Mortgage Lenders (CML) has revealed.
Over recent weeks, the news has been awash with both optimistic and damning reports on the UK’s housing market. But the CML claims that, while house prices may be fluctuating, repossessions and cases of arrears are continuing to improve.
According to CML figures, there were 9,400 repossessions over the past three months, down from 9,800 in the first quarter and 11,800 in the second quarter of 2009.
By the end of June the number of mortgages behind with payments also fell. There were 178,200 loans with arrears equivalent to 2.5% or more of their mortgage balance, 5% lower than at the end of March, and 17% lower than a year earlier.
The CML now expects 175,000 mortgages to end the year 2.5% or more in arrears, compared with the previous forecast of 205,000, while 39,000 repossessions are now forecast for 2010 as a whole, compared with the previous forecast of 53,000.
However, the CML was keen to stress that the market has not rebounded fully and homeowners should still be cautious.
"Mortgage difficulties have so far been contained at lower levels than we expected at the start of the year, and by comparison to the 1990s recession,” commented CML Director General, Michael Coogan.
"However, the safety net for borrowers is weakened by the prospect of higher interest rates, a possible rise in unemployment, a counter-productive stigma hanging over mortgage payment protection insurance, uncertainty over future debt advice funding, reduced government support for mortgage payments, and mortgage rescue schemes being reviewed as part of the deficit reduction plan.
"While we don't want to cry wolf, it seems obvious that the ongoing prognosis for arrears and possessions is far from a healthy all-clear.”
Those struggling to maintain their mortgage repayments or facing the threat of repossession have been advised to seek help as soon as possible.