House repossessions fall, but tougher times may lie ahead

Posted in 'Dealing with Debt' by Barry Stamp

20 August 2010

The number of houses being repossessed and the number of homeowners in arrears on their mortgage repayments both fell in the second quarter of 2010. But could this be the calm before the storm?

The Council of Mortgage Lenders (CML) has reported that 9,400 homes were repossessed in the second quarter of 2010, compared to 9,800 in the first quarter and 11,800 in the same period last year. It has also revealed that the number of people with serious arrears on their mortgage (defined as 2.5% or more of their outstanding balance) has also fallen.

Just over 178,000 households were in arrears at the end of June – 5% lower then the figure at the end of March and a telling 17% lower than at the same time in 2009. The CML has now lowered its forecast for the number of mortgages that will be in arrears at the end of the year down from 205,000 to 175,000.

The overall reduction can be put down to a number of factors, including increased leniency by lenders, the Bank of England base rate remaining low, increased and more effective debt advice funding and government support in the form of mortgage repayment rescue schemes.

The CML has welcomed the reduction but at the same time has been quick to warn that the worst may not yet be over. Government reviews into spending could threaten the funding for debt advice and mortgage rescue schemes, uncertainty remains over levels of unemployment and there is an increasing risk of future increases in the base rate. Debt charities such as the CCCS have also issued similar statements.

If you are worried about your finances, whether on your mortgage, other borrowings, or just day-to-day cash flow, you can get free, impartial advice on what steps you can take by using the Debt Advice Centre on checkmyfile.

You’ll find simple, easy-to-understand information tailored to your situation, and using the service is completely anonymous.

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