Falling repossessions could rise again, warn charity
Council of Mortgage Lender figures show repossessions continued to fall in the second quarter of 2010.
The trade body’s figures out today say there were 9,400 repossessions in the period, down from 9,800 in the first quarter and 11,800 in the second quarter of 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 per cent or more of their mortgage balance. This was 5 per cent lower than at the end of March, and 17 per cent lower than a year earlier.
CML director general Michael Coogan said: ‘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.
‘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.’
The on-going future for arrears and possessions was ‘far from a healthy all-clear,’ he added, and urged the government not to remove ‘support mechanisms that work’.
National debt charity Consumer Credit Counselling Service warned a rise in repossessions is likely over the next year.
Malcolm Hurlston, CCCS chairman, said: ‘There is no doubt that lenders have shown leniency towards debtors during the recession by not enforcing suspended possession orders. However, this leniency may have been partly determined by the markets.
‘In addition, some lenders are increasingly showing reluctance in allowing struggling debtors to switch to interest-only mortgages as a short term solution, giving people the necessary breathing space to find other more sustainable options.’
Communities Secretary Eric Pickles said: ‘Today’s figures from CML are good news and an encouraging sign that fewer homeowners are facing the real and frightening prospect of repossession.
‘But there is no room for complacency – struggling homeowners must take early advice to have the best chance of staying in their homes.’
John Healey, former housing minister and Labour’s shadow cabinet minister for housing, said: ‘Recent statements from government ministers combined with gloomy forecasts for the economy run a real risk that many families will be cast adrift in ways similar to the early 90s, when the then Tory government left struggling homeowners to fend for themselves.’
Picture credit: Laura Hughes
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Readers' comments (2)
Melvin Bone | 12/08/2010 2:09 pm
So this is really good news, but with a bad news spin?
Bizarre.
The figures are the fact.
Should the headline not be 'Good News: Repossessions Fall'
Everything else in this article is crystal ball gazing.
I love John Healey blaiming a 'gloomy forecast' for possible doom. So much better to make up overly optimistic projections and leave black holes in the finances for others to find eh John?
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Chris | 12/08/2010 5:30 pm
So the position to June 2010 shows continued improvement. Thank you Darling.
Shall we see how thinks are in a years time when Osburne's economic greatness will have had an effect?
Does anybody remember Osborne and his BofE cronnies, business leaders and other assorted experts telling us before the election that Darling was off his head if growth was going to return so strongly as he predicted for the middle of this year - yet yo growth returned strongly just as predicted, with the caveat that 'recent announcements' means that this will not be sustained - wow thanks for killing of the recovery so quickly George.
I may not support the gloom rakers, but I will not ignore their forcasts, which have a history of being in the right ball park, compared with the current forecasters.
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