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Small rise in home repossessions Lenders cut repossession forecast
(30 minutes later)
The number of properties repossessed in the July to September period rose by 3% to 11,700, according to figures from the Council of Mortgage Lenders (CML). The number of homes likely to be repossessed this year will be only 48,000, the Council of Mortgage Lenders (CML) said.
The total was up 5% from the same period a year ago. It is the second time this year it has cut its forecast.
But the CML said it was now cutting its forecast for total repossessions for a second time this year, to 48,000. If its prediction is accurate, this will see repossessions rising by just 8,000 compared to 2008.
It said repossessions were being staved off by a combination of "lender forbearance", government measures and the effect of low interest rates. The CML's comments came as it revealed that repossessions in the July-to-September period rose by 3% to 11,700 - up 5% from the same period a year ago.
Last year, the CML thought that repossessions would rise steeply in the course of 2009 to about 75,000, but it now thinks they will end up just 8,000 higher than 2008's figure of 40,000. Last year, the CML thought that repossessions would rise steeply in the course of 2009 to about 75,000.
"We are glad to have been wrong on our previous forecast for mortgage repossessions this year," said the CML's director general Michael Coogan. But it said they were being staved off by a combination of "lender forbearance", government measures and the beneficial effect of low interest rates.
"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," he added. "We are glad to have been wrong on our previous forecast for mortgage repossessions this year," said the CML's director general, Michael Coogan.
"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," he added.
Arrears fall
The CML also reported that both the number and proportion of mortgages in arrears fell in the third quarter, despite the economy moving deeper into recession and unemployment rising.The CML also reported that both the number and proportion of mortgages in arrears fell in the third quarter, despite the economy moving deeper into recession and unemployment rising.
At the end of September there were 194,600 mortgages - 1.77% of the total - which had accumulated arrears of 2.5% or more of the outstanding loan. At the end of September, there were 194,600 mortgages - 1.77% of the total - which had accumulated arrears of 2.5% or more of the outstanding loan.
The number in arrears was 9,600, or 5%, fewer than the 204,200 mortgages in that position at the end of June, which were 1.86% of the total number of mortgages at that time.The number in arrears was 9,600, or 5%, fewer than the 204,200 mortgages in that position at the end of June, which were 1.86% of the total number of mortgages at that time.
Even so, the September figure was still 29% higher than at the same stage last year.Even so, the September figure was still 29% higher than at the same stage last year.
The number of potential repossessions in the pipeline in England and Wales is also falling, according to separate figures from the Ministry of Justice (MoJ).
It said that the number of possession actions launched in the courts in the third quarter was 24,337. This was 7% fewer than in the previous three months and 37% lower than at the same time last year.
The number of possession actions actually agreed by the courts fell similarly.
Judges granted 17,134 possession orders in the third quarter of this year - 9% fewer than in the second quarter of this year and 35% down on the same period of 2008.
The MoJ pointed out that the fall in both actions and orders had been influenced by the introduction in November 2008 of a formal mortgage pre-action protocol agreed by mortgage lenders and the legal authorities.
This new set of rules laid down the steps that lenders should take before starting a repossession action, including talking to borrowers about their financial problems and considering any offer from them to reschedule their payments.