Repossessions dip below forecast – but set to rise this year
The total number of properties repossessed by lenders last year was 36,200, below the estimate of 40,000 and the lowest annual total since 2007.
However, repossessions this year are predicted to rise to 45,000 and debt experts said it was the calm before the storm, warning that lender forbearance hides the true state of borrowers’ finances.
Figures from the Council of Mortgage Lenders show that repossessions ticked down markedly in the fourth quarter of last year and at 8,500 were nearly 9% down on the 9,300 in the third quarter.
Buy-to-let accounted for 5,900 of all of last year’s repossessions, up from 4,700 in 2010. Overall, 0.31% of owner-occupied properties were repossessed, and 0.42% of buy-to-let properties.
Arrears last year were also down on 2010. In the buy-to-let sector, arrears were lower than in the owner-occupier sector – 20.06% in the latter and just 1.79% in the former.
Despite its new data, the CML said it has no current plans to revise its 2012 forecasts of 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.
“Forbearance cannot be indefinite; but for most households, arrears are temporary and can be resolved.”
Tags: buy-to-let, Council of Mortgage Lenders, National News, Property Repossession