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Five year low in number of mortgage repossessions

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Five year low in number of mortgage repossessions

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Published by Max Salsbury for 24dash.com in Housing and also in Finance

Mortgages fall to sevon month low Mortgages fall to sevon month low

The number of mortgage repossessions dropped to the lowest figure in five years at the end of 2012.

The Council of Mortgage Lenders (CML) today reported a fall in the number of properties taken into possession by first-charge residential mortgage lenders from 8,200 in the third quarter of 2012 to 7,700 in the fourth quarter, maintaining a repossession rate of 0.07 percent.

It was the lowest quarterly number since the fourth quarter of 2007.

On an annual basis, repossessions fell from 37,300 in 2011 to 33,900 in 2012 - the lowest annual figure since 2007 - bringing the rate of repossession down from 0.33 percent in 2011 to 0.30 percent last year.

The stock of properties in possession held by lenders at the end of 2012 was also at its lowest for over five years.

The CML additionally revealed that the number of households experiencing mortgage arrears also fell.

A total of 157,900 households ended 2012 with arrears of 2.5 percent or more of the mortgage balance, compared with 161,400 households at the end of 2011 (and 216,400 at the peak of the current arrears cycle at the end of the first half of 2009).

This maintains the arrears rate at 1.4 percent, the same rate for the second consecutive year.

But while the number of households in lower arrears bands has fallen fairly consistently since 2007, the number of cases in the highest band (arrears of more than 10 percent of the mortgage balance) increased slightly from 28,200 at the end of 2011 to 28,900 at the end of 2012.

The CML's director general, Paul Smee, said: "The fall in arrears and possessions is obviously very welcome. Households fall into difficulty for a variety of reasons, most of which cannot be anticipated. Wherever possible, lenders will work with borrowers to manage periods of temporary financial difficulty and enable them to keep their home. Anyone worried about their situation should talk to their lender, who will try to help them."

Jonathan Harris, director of mortgage broker Anderson Harris, added: "Although the number of repossessions fell in the fourth quarter compared with the third, many households are still struggling financially. While base rate is expected to stay at 0.5 per cent for the foreseeable future, there are thousands of people who have already got into difficulty and are struggling to get out of it.

"While mortgage rates continue to fall on the back of the Funding for Lending Scheme, only those with significant equity cushions can access the market-leading deals. Those up against it and in danger of having their homes repossessed don't have this luxury so can't remortgage onto the cheapest rates. Subsequently, some homeowners are getting into difficulty paying their mortgage because they can't afford the payments on top of high living costs, low wage rises, and in some cases, losing their jobs.

"It is essential that lenders continue to show forbearance and look after customers who are struggling by switching them to interest only, allowing them to take payment holidays or extend their mortgage terms, where practical. Likewise, borrowers must seek help, preferably before they miss a payment, speaking to their lender or one of the specialist - and free - debt agencies, such as Citizens Advice Bureau."

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