Online news: Low repossession figures hide storm to come 9 February 2012

Properties repossesed last year fell to 36,200 the lowest level since 2007, according to figures from the Council of Mortgage Lenders (CML).

For the fourth quarter of 2011, the period for which new data is available today, repossessions were 8,500, meaning around 101 properties were taken into possession every day. This was almost 9% down from the 9,300 in the third quarter, but a rise of 5% from the 8,100 in the fourth quarter of 2010. While the figures were good, reflecting on-going low interest rates and increased flexibility from lenders, one commentator to claim it could be the “calm before the storm”.

The figures also showed modest improvement across all arrears bands in the fourth quarter and in 2011 as a whole compared with the previous year. At the end of 2011, 159,400 mortgages had arrears equivalent to 2.5% or more of the mortgage balance, 7.5% down from 172,400 at the end of 2010.

The CML voiced fears worsening unemployment and continuing pressures on the cost of living “seem likely” to result in some further “deterioration” this year.

CML estimates indicate 2012 is likely to result in around 45,000 repossessions and around 180,000 mortgages in arrears of 2.5% or more by the end of the year.

CML director general Paul Smee said: “Low interest rates and good arrears management by lenders are helping the vast majority of those borrowers who face difficulties to keep their homes and get back on track.

“This will continue, but in the face of wider economic difficulties and rising unemployment, we are concerned that there will be a higher number of people facing more serious problems in 2012.”

The Debt Advisor managing director Bev Budsworth said: “I’m not surprised levels of repossessions have continued to fall as, despite the economic doom and gloom, lenders are not seeing an increase in arrears or missed mortgage payments.

“Thankfully, due mainly to record low interest rates and increased flexibility from lenders, people are still paying their mortgage – but only just.

“The CML is predicting 45,000 repossessions for this year so it’s clear that they expect things to get worse, not better.

“This isn’t great news, especially if you own one of the 101 properties being repossessed every day but at least it’s lower than previous years – especially the levels seen in the 90s.”