Repossessions stabilise but 100 families a day still lose their homes

Research from the Council of Mortgage Lenders (CML) shows the number of repossessions in the first quarter of 2012 was 9,600 – the same as in the first quarter of 2011. That is equivalent to about 100 every day.

Repossessions in the first quarter of this year were higher than the 8,700 in the fourth quarter of last year but that represents a normal seasonal pattern.

The report said that, overall, the repossessions landscape appears stable for the time being.

The figures on payment arrears – the proportion of payments missed by borrowers – showed that the number of people in lower and middle bands falling behind with payments was declining. But there was a year-on-year increase with those with loans of 10 per cent or over – the higher band.

The largest improvements came in the middle arrears bands with the number of loans in the 5-7.5 per cent arrears band falling by 12 per cent in a year – reaching its lowest number since the fourth quarter of 2008.

However, the only band showing a year-on-year increase was the group of loans with arrears of 10 per cent and over. There were 28,000 loans in this category, 300 higher than a year earlier, representing the highest number since June 2000.

The report said its prediction for 45,000 repossessions this year may be revised downwards when it publishes its housing market forecasts in the summer.

But it warned continuing pressure on household budgets, changes to welfare benefits and an upward drift in mortgage rates all had the potential to disrupt the current stable picture.

Paul Smee, CML director general, said: “Combined efforts by borrowers, lenders and money advisers are ensuring that payment difficulties are being managed effectively, with the result that the number of repossessions remains relatively low.

“Repossession really is a last resort, as the numbers show.”

Gordon MacRae, head of communications at Shelter Scotland, said: “Although the numbers appear to be stable for the time being, there is no room for complacency – 9,600 families and individuals had their lives ripped apart by repossession in the last quarter alone.

“Calls to our free helpline from homeowners living in fear of losing their homes has increased by 110 per cent. We are particularly concerned to see an increase in the number of homeowners with arrears of 10 per cent and over.”

Meanwhile, another CML report showed buy-to-let lending was 5 per cent down on the fourth quarter of 2011 – totalling £3.7 billion, or 32,000 loans. While this is 32 per cent higher than the first quarter of last year, the sector is still only around a third of its 2007 levels.