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Repossessions increase by 6,400

The number of people having their homes repossessed has lifted for the first time in a year, figures released by banks and building societies show.

Some 6,400 repossessions took place in the first quarter of 2014, a 4.9% increase compared with the fourth quarter of 2013, which had seen the lowest quarterly total since the Council of Mortgage Lenders' (CML) records began in 2008.

The last time the figures increased on the previous three months was in the first quarter of 2013, although the CML said repossessions are still down by 20% in the first quarter of this year compared with the 8,000 during same period a year ago.

The CML said it is "usual" for repossessions to edge up at the start of the year. This could partly be due to households in financial difficulty trying to struggle on through Christmas.

The figures also show that the number of mortgages where home-owners have fallen into arrears of more than 2.5% of the mortgage balance has fallen to its lowest levels since spring 2008.

Some 138,200 home loans, representing 1.24% of all mortgages, are in this level of arrears, representing a 4.4% drop on the previous quarter.

The number of mortgages in arrears has also fallen in the most serious bracket, with the latest quarterly figures showing that 27,800 home loans, or one in every 400 mortgages, have arrears of 10% or more of the mortgage balance.

Some 28,900 repossessions took place across the whole of last year, marking the lowest annual number seen in figures released by the CML since 2007.

A spokesman for the CML said the body stands by a previous prediction for repossession numbers this year and it still expects the total to sit at around 28,000 for the whole of 2014.

CML director general Paul Smee said: "The downward trend in the number of mortgages in arrears or ending in repossession is obviously very welcome. Repossession is absolutely the last resort - the aim is to keep people in their home and get their finances back on track wherever possible.

"Lenders fully recognise that behind the numbers, these are real households, with differing circumstances.

"Lenders try to ensure that all borrowers are treated fairly and sensitively. They continue to improve their practices to try to achieve the best outcomes when payment problems do occur. Combined with low interest rates and an improving jobs market, these strategies are clearly helping many households."

Separate figures released today by the Ministry of Justice (MoJ) showed that the number of mortgage possession claims in county courts across England and Wales fell to 12,704 between January and March this year, marking the lowest quarterly figure seen in a decade.

The MoJ said that a fall in the number of mortgage possession claims in courts since 2008 coincides with lower interest rates, a proactive approach from lenders in managing people in financial difficulties and government interventions such as the Mortgage Rescue Scheme.

A mortgage lending clampdown came into force last month, which mean that people applying for a mortgage now face more probing questions about their spending habits to work out whether or not they can afford their repayments.

Lenders also have to apply "stress tests" to make sure that the applicant could still afford their home loan as and when interest rates rise.

But concerns have also been growing that the sharp pace of house price growth in some areas could encourage some people to really try to stretch their borrowing.

This has fuelled speculation that the Bank of England could step in and impose measures to calm the market.

Housing minister Kris Hopkins said: "Official Government statistics show repossessions claims are falling and in the last quarter were the lowest in over a decade. This has only been achieved because of this Government's long-term economic plan to fix the broken housing market and tackle the record deficit we inherited.

"This has kept interest rates low and home ownership is now at its most affordable since 2007 with mortgage approvals at a six-year high."


From Belfast Telegraph