Home Repossessions hit five-year low

LONDON (ShareCast) - Home repossessions have fallen to their lowest number in five years, a report by the Council of Mortgage Lenders has found.

Quarter-on-quarter, the number of properties taken into possession by first-charge residential mortgage lenders declined from 8,200 to 7,700.

The decline is largely thanks to interest rates staying at a record low.

Annually, repossessions fell from 37,300 in 2011 to 33,900 in 2012, the lowest level since 2007.

The CML also said that the rate of repossessions has dropped from 0.33% in 2011 to 0.30% in 2012.

Furthermore, the number of households experiencing mortgage arrears of 2.5% or higher also declined 3,500 between the December 31st 2011 and one year later.

However, 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% of the mortgage balance) increased slightly from 28,200 at the end of 2011 to 28,900 at the end of 2012, the CML noted.

CML 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."