Repossession levels ‘holding steady’

The number of repossessions was almost unchanged in the third quarter, new figures have revealed.

Council of Mortgage Lenders (CML) statistics for the third quarter of this year showed 9,200 homes were taken back by its members, up slightly from the 9,100 in the second quarter.

However, this still equated to just 0.08 per cent of home loans and the CML noted this has been the figure for five of the past six quarters, the exception being a rate of 0.07 in the final three months of 2010.

Debt consolidation efforts by consumers also appear to have brought some success among households with arrears, bringing the tally down from 165,200 to 161,600 in the last 12 months, a 0.3 per cent reduction overall.

However, consumers may need to do more as the report suggested the squeeze on incomes of the past year has the potential to lead to an increase in arrears in the next few months.

Reflecting on the figures, CML director general Pual Smee said: "The fall in the number of mortgages in arrears and the stable picture on repossessions, are testament not only to the beneficial effects of low interest rates, but also to effective arrears management and good communication between lenders, borrowers and debt counselling organisations."

The CML figures are not the only piece of repossession data out this week showing the repossession situation is not as bad as might be expected during an economic crisis.

Finance and Leasing Association statistics for second charge mortgages by its members show that so far in 2011 there have been 649 repossessions, a 7.8 per cent drop on the equivalent figure this time last year.

By Joe White