Repossessions Forecast Cut Amid Mortgage Arrears Decline
The Council of Mortgage Lenders (CML) has reported that property repossessions in the quarter to June 2010 has fallen by 4% on the previous three months. In addition, those with arrears of more than 2.5% of the balance also fell 5%, which has resulted in a softening of repossession projections for the full year from 53,000 to 39,000. The ministry of Justice also revealed that repossession orders during the quarter were down 7% on the previous three months, although it has been suggested this may simply be due to lenders biding their time and suspending orders until house prices have risen sufficiently.
However, this optimism was sounded with a note of caution as those with arrears of more than 10% of the mortgage balance, those at highest risk of repossession, stayed at the same level. CML also warned that inevitable increases in lending rates, an imminent reduction in Government mortgage interest payment support to match Bank of England's average mortgage rate and potential funding cuts for debt advice agencies could see this trend reversed.
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