Posted by: Jules Birch14/05/2010
Another fall in repossessions must be encouraging the Treasury see schemes to help people who risk losing their homes as a tempting target for cuts.
It’s not just the fact that repossessions are a two-year low, or even that the Council of Mortgage Lenders (CML) says that its forecast of 53,000 foreclosures this year looks too pessimistic. It’s also that much of the existing support was time-limited and runs out at the end of this year.
Against that background though both the CML and Shelter warned in a joint letter to George Osborne and Vince Cable about the dangers of complacency. They argue that the better than expected figures are the result of the support measures and record low interest rates and Shelter released a survey showing that 29% of mortgage payers are unprepared for an increase in loan rates.
Figures released by the CML yesterday showed there were 9,600 repossessions in the first quarter of 2009, compared to 10,600 in the previous three months and 13,200 this time last year.
The number of borrowers in arrears fell too but the CML pointed out that the fall was much more marked among people with lower arrears than those substantially behind with their payments. It said this suggested that low interest rates and lower unemployment were helping to prevent new households getting into difficulty but that those already in trouble were struggling to get out of it.
The CML’s current forecast for this year assumes that 13,000 families will lose their homes per quarter. ‘If current levels of government support continue, if interest rates do not rise, and we have no new economic shocks, the 53,000 repossessions forecast for the year is pessimistic,’ it said.
The Communities and Local Government said the figures showed that ‘the threat of repossession remains very real for homeowners across the country’.
‘That’s why the Secretary of State for Communities and Local Government, Eric Pickles, will be asking the new Housing Minister to take a fresh look at existing Government schemes which help homeowners struggling to pay their mortgage and make sure that they offer the best deal for homeowners, as well as value for money for the taxpayer.’
It was a gnomic response that gave little away but how telling could that ‘fresh look’ and ‘as well as value for money for the taxpayer’ prove to be?
From Inside edge
Housing commentator Jules Birch puts the latest news in context