Belfast Telegraph

Thursday 28 August 2014

Fewer people expected to lose homes

Fewer people are expected to lose their homes this year after mortgage lenders reported a decline in repossessions in the quarter to June.

A total of 9,400 homes were repossessed during the second quarter of 2010, down 400 from the previous quarter, and 2,400 below the figure for the same period of 2009, according to the Council of Mortgage Lenders (CML).

The figure led the CML to revise its forecast for total repossessions in 2010 as a whole - it now predicts 39,000 repossessions for the year, compared with November's estimate of 53,000 and the 47,700 reported in 2009.

The number of mortgages behind with payments also fell. At the end of June there were 178,200 loans with arrears equivalent to 2.5% or more of their mortgage balance. This was 5% lower than at the end of March, and 17% lower than a year earlier.

The CML is now expecting 175,000 mortgages to end the year 2.5% or more in arrears, compared with the previous forecast of 205,000.

Low interest rates, increased lender forbearance and the introduction of Government schemes to help people who are struggling to keep up with their mortgage have helped to reduce the figures. But the CML warned that any hike in interest rates and a rise in unemployment could put borrowers in a precarious position, and urged the coalition government to maintain its support for homeowners.

CML director-general Michael Coogan said: "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. We hope the coalition government will not risk undermining the chances of extending the welcome trends this year by removing support mechanisms that work."

A total of 980 families had so far completed the Mortgage Rescue Scheme, under which vulnerable households who are facing repossession can sell some or all of their home to a social landlord and rent it back.

The CML's optimistic figures were tempered by warnings from the Government that more people were being forced into selling their home before any court action was taken against them.

Research from the Centre of Housing Policy at the University of York showed financial difficulties, often triggered by a relationship breakdown and other loans secured on the property, were forcing home owners to sell up.

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