Repossession avoidance options noted

Those keen to avoid repossession have some ways of doing so, an expert on property finance issues has stated.

Editor of What Mortgage Ben Wilkie said the record low base rate has played a major part in ensuring that the recession has not led to a vast number of people being turfed out of their homes by their creditors.

He remarked: "If people are in trouble then there are options available to them. One of those options is to go interest-only and an interest-only mortgage is costing you virtually nothing with a tracker or variable rate deal."

This will have meant the number of individuals who lose their homes is less than might normally be expected in economic hard times, he noted.

Such a situation may remain the case as long as the base rate remains low, as it could be that this will only be increased by the Bank of England as and when the economy starts to recover – which, it may be reasoned, will be accompanied by better job and pay prospects for homeowners and thus the chance to be able to cope with higher repayments in the future.

Earlier this week, figures from the Financial Services Authority indicated how well many people are coping with their mortgage situation despite the continued weakness of the economy.

It revealed that the number of new arrears cases at the end of the second quarter of 2011 (35,700) was around the same as three months before, but down by four per cent on the same time in 2010.

The total number of arrears cases was six per cent lower than 12 months earlier at 332,700.

By Joe White