Small rise in home repossessions

Rising unemployment did not significantly add to the number of people who lost their home during the third quarter of the year, with the figure rising by only 3%, according to figures.

The number of people who have had their homes repossessed has fallen from the 12,700 recorded in the first quarter of the year, the Council of Mortgage Lenders said. The figure for July-September stands at 11,700 repossessions, although this is higher than the 11,400 in the second quarter.

Government schemes to allow people to stay in their homes, low interest rates and increased lender forbearance led the group to slash its forecasted number of repossessions during the year to 48,000.

It had originally predicted 75,000 people would lose their homes this year, although it revised the figure down to 65,000 in June.

The number of people who were behind with mortgage repayments also dropped during the third quarter, despite the bleak economic backdrop.

Around 194,600 people were in arrears of at least 2.5% of their outstanding mortgage at the end of September, the equivalent of 1.77% of all mortgage customers, down from 204,200 or 1.86% at the end of June.

The CML said it now expected 195,000 people to be in arrears at the end of this year, well down on its previous forecast of 360,000.

It is also predicting there will be only a modest deterioration in the number of people who are unable to keep up with their mortgage next year, with repossessions expected to rise to 53,000 in 2010, while it predicts the number of people in arrears will increase to 205,000.

CML director general Michael Coogan said: "We are glad to have been wrong on our previous forecast for mortgage repossessions this year.

"Low interest rates, and lenders' forbearance policies, have helped to cushion many households facing financial problems.

"And although the economy is not out of the woods yet, we no longer expect a dramatic rise in properties being taken into possession unless interest rates rise from the low levels that most commentators now expect to persist for some time."