House repossession figures dip below 2007 levels for the first time

Housebuilders are hoping that recovery holds steady. Picture: PA
Housebuilders are hoping that recovery holds steady. Picture: PA
Share this article
Have your say

THE NUMBER of people losing their homes after failing to pay their mortgage is at its lowest level since 2007, according to new figures.

• House repossessions have fallen to their lowest levels since 2007, new figures show

• 8,200 properties repossessed from July-September, the lowest in a single quarter for five years

A total of 8,200 properties were repossessed from July to September this year, according to figures released by the Council of Mortgage lenders.

This is the lowest number of properties taken in a single quarter since 2007.

CML director general Paul Smee said: “Our figures show that good communication and effective arrears management by borrowers, lenders and money advisers are helping the vast majority of those with mortgage repayment problems. The rate of repossession has continued to fall and it’s clear that lenders want to keep people in their homes.

“Repossession really is a last resort, but it’s essential for anyone worried about their mortgage to talk to their lender as soon as possible – it is more difficult to resolve problems when they are not tackled early.”

According to the CML the total number of mortgage holders with arrears of 2.5 per cent or more rose slightly from 159,100 to 158,700. There was a small increase in the number of people with arrears of more than ten per cent - from 28,600 to 29,000.

Richard Sexton, director of e.surv chartered surveyors, said: “Banks are doing a great job of keeping struggling borrowers in their homes. Long-term arrears have risen yet repossessions are down, which is thanks to lenders’ generous forbearance policies. The issue is whether this is a sustainable approach in the long-term.

“This is the fourth quarter in a row where arrears of 10 per cent or more have increased, yet repossessions have remained broadly flat. Banks won’t be able to go on absorbing long-term arrears into their balance sheets infinitely, and they also have a duty of care to ensure borrowers don’t build up ‘too much’ debt by allowing them to stay in a property if this is unsustainable.

“So the market may well reach a tipping point where lenders can’t afford to carry on sustaining all these struggling borrowers. Longer term, the jury is also out as to whether the recently highlighted interest-only issue is a real one. Lenders are exposed to around £120 billion in outstanding interest-only mortgages with no specified repayment plan that are due to mature in the next 8 years, which suggests mortgage arrears will continue to increase well into the future and could impact on repossession levels up to 2020.”