Home repossession numbers fall
The number of home repossessions has fallen to its lowest level in a year and-a-half despite the toughening economy, lenders have said.
There were 8,500 repossessions between April and June this year, marking the lowest quarterly total since the last three months of 2010, said the Council of Mortgage Lenders (CML).
The CML said the figures indicate that repossessions are so far on a "lower trajectory" than its previous forecast that they will rise to 45,000 by the end of the year. But it warned that the stable pattern could still be disrupted amid the Bank of England's weak forecasts for economic growth.
A spokesman for the CML said the body is maintaining its previous prediction that repossessions will increase by the end of this year, as the "uncertain backdrop" of the wider economy remains and household finances are still under intense pressure amid high unemployment and low wage increases.
There were 18,100 repossessions in the first six months of this year, a figure which is less than half of the total predicted by the CML for the whole of 2012. But the number of borrowers with high levels of arrears has been creeping up, which is a position they will find it quite difficult to recover from, the CML spokesman said.
There were 28,300 mortgages with arrears of more than 10% of the balance, an increase from 28,000 during the previous quarter. The number of mortgages in arrears generally remained broadly flat in the second quarter, the figures showed.
More than a million home owners saw their mortgage rates rise in May, following a string of increases announced by lenders, blaming the weak economy and the increased funding costs. Lenders have also been tightening their borrowing criteria in recent months, causing a drop in the proportion of mortgage approvals, making it tougher for people to get a mortgage or switch to a cheaper deal.
The body, whose members include banks and building societies, has said that lenders' forbearance has helped to ease the situation, with some reducing rates temporarily, as well as extending payment dates.
The CML's director general Paul Smee said: "The figures show that lenders, borrowers and debt advisers are working together to get through the current period of economic difficulty and keep mortgage possessions in check.
"Generally, when borrowers prioritise their mortgage commitments, lenders can provide help appropriate to their individual circumstances. But success in managing temporary payment problems depends on everyone working together, and it is essential for anyone worried about their mortgage to talk to their lender as soon as possible."