Repossessions at lowest level since 2007

Home repossessions have fallen to their lowest level since the fourth quarter of 2007.

Research by the Council of Mortgage Lenders (CML) found 7,700 properties were taken into possession in the final three months of 2012, which represented a decrease on the figure of 8,200 recorded in Q3.

Treating 2012 as a whole, there were 33,900 repossessions, down from 37,300 in 2011 and it means there has been a steady reduction since 2009. This is positive news for households, as it means more consumers are dealing with their debts and managing their money in a more effective manner.

There has also been a drop in the number of people facing mortgage arrears, as a total of 157,900 households finished the year with arrears of 2.5 per cent or more of the mortgage balance.

CML director-general Paul Smee stated: "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."

If people are struggling with debts, they should seek out advice before the situation spirals out of control and they are forced to sell their home. Consumers can use a debt management plan to bring their reduce monthly repayments and freeze any interest.

Sir Mervyn King, the governor of the Bank of England, admitted yesterday (February 13th) that households can expect living costs to remain stubbornly high for the foreseeable future. This emphasises how important it is for individuals to look after their finances.

Rising bills, coupled with below-inflation pay rises, means circumstances are going to remain challenging as people struggle to make ends meet.

By James Francis