Home Repossessions Fall Again!

by Mark Johnston

Home Repossessions Fall Again!

Data shows that repossession figures in the recent financial crisis peaked in 2009 when there were 48,900 homes seized over the course of the year.

In a Fitch, a leading provider of credit ratings, commentary and research, recent residential property value analysis report it said that 87 per cent of homes that have been repossessed since the start of the financial crisis have been sold at a loss.

house price crashThis means properties are being sold at a price below the balance of the remaining mortgage.

However, this said it now appears that the number of repossessions has generally stabilised at lower than anticipated levels since the economic.

It seems then that as mortgage lenders continue to offer leeway to borrowers the number of homes being taken back has fallen again.

Figures published by the Council for Mortgage Lenders (CML) show the number of homes being taken back by lenders dipped to 15,700, the lowest number since the second half of 2007, when the financial crisis struck, when there were 13,100 cases.

On a quarterly basis, the number is also falling, down from 8,000 in the first quarter to 7,700 between April and June, equivalent to 0.07 per cent of all outstanding mortgages.

This put repossession levels back to the same position as the last three months of 2012.

The Council of Mortgage Lenders (CML) director general Paul Smee said: “The figures show that lenders, borrowers and debt advisers are working together to get through the current period of economic difficulty and keep mortgage possessions in check.”

The Ministry of Justice has also released figures for the number of mortgage repossession actions started by lenders in the courts in England and Wales, which has also dropped by 8 per cent on the previous quarter, with 15,050 claims issued between April and June.

These results are largely thanks to the fact that since the financial crisis, the Government and regulator have pushed banks to offer help to struggling homeowners such as payment holidays, temporary reductions in monthly repayments, temporarily switching borrowers to interest only mortgages or extending mortgage terms to increase people’s chances of remaining in their homes.

Many experts believe that the success in managing temporary payment problems depends on everyone working together.

All this said the number of borrowers with high levels of arrears has been creeping up, which is a position they will find it quite difficult to recover from.

There is however light at the end of the tunnel for borrowers as just recently the Bank of England said it would not consider raising the Bank rate until the jobless rate has fallen to 7 per cent or below, which could be another two or three years.

So in conclusion, the fact is repossession can be a frightening prospect for any home owner but as ever, the key message for those borrowers is that they should talk to their lender as soon as possible if they believe they are in danger of missing a mortgage payment.

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