Figures published today by the Council of Mortgage Lenders (CML) show that the number of repossessions in the second quarter of 2013 reached 7,700, 4% down from the 8,000 seen in the first quarter of this year. At 15,700, the first six months of 2013 also represented the lowest number of repossessions since the second half of 2007. Levels of mortgage arrears also reduced to the lowest numbers since the latter part of 2008.
Bev Budsworth, managing director of multi award-winning debt management company, The Debt Advisor, stated: “It’s not surprising that today’s figures show levels of arrears and repossessions continue their downward trend. We are seeing far fewer cases now where repossession is an imminent threat, which is mainly due to the joined up approach by government, lenders and advisers alike over the last few years to address the problem and provide support to people in arrears.
“Today’s figures are testament to the fact that this concerted effort is working, despite the fact that we still have a relatively sluggish economy and high living costs.”
Interest rates
“Yesterday’s announcement from the Bank of England governor that he won’t consider increasing interest rates until unemployment falls below 7% is great news for all homeowners and provides a real boost for those who are currently struggling to make ends meet. Unemployment currently stands at 7.8% so a reduction to below 7% will mean that at least 750,000 new jobs will have to be created – no mean feat. The bank believes this could take three years – which will mean at least a few more years of record low interest rates which should help to keep a lid on repossessions.”
Bev’s comments come at a time of an upturn in the housing market with lenders reporting a ‘meaningful recovery’ and the CML reports that June saw a 2% increase from May in mortgage lending and a 26% increase on June 2012. Total mortgage lending now stands at £14.7 billion, the highest level since October 2008, with loans to first time buyers seeing a particular increase.
Complacency
“However, we mustn’t get complacent,” warned Bev, “With nearly 90 properties a day being repossessed, there is still a real problem that we must continue to address – especially with those still on interest-only mortgages.
“We are not out of the woods yet; yes it’s great to see that arrears and repossessions are down and so too is personal debt – but a lot of people are still facing financial hardship in a shaky economy with prices rising continually. These are people with real affordability problems, these are the ones who need everyone’s continued support in order to get them paying back their mortgage and contributing to the economy.”
“The UK has a fantastic rescue culture and people with arrears or who are facing repossession can turn to a plethora of valuable sources of help and information across both the public and private sector.”
The CML has maintained its most recent forecast that there will be 35,000 repossessions and 160,000 mortgages in arrears of 2.5% or more for the rest of 2013.