Home repossessions continue to fall - for now

The number of people losing their home after not keeping up with mortgage payments is continuing to fall, according to lenders.

The fall to 9,400 repossessions in the second quarter of 2010, from 9,800 in the first three months of the year, partly reflects continuing low interest rates and help from lenders ‘offering a wider range of forbearance strategies’, the Council of Mortgage Lenders reported.

The trade group has dropped its forecast for repossessions in 2010 as a whole to 39,000 compared with the previous forecast of 53,000.

But CML director general Michael Coogan listed several reasons why borrowers should not interpret the figures as a ‘healthy all-clear’:

• the prospect of higher interest rates
• a possible rise in unemployment
• a ‘counter-productive stigma’ hanging over mortgage payment protection insurance
• uncertainty over future debt advice funding
• reduced government support for mortgage payments
• mortgage rescue schemes being reviewed as part of the deficit reduction plan

Debt charity Consumer Credit Counselling Service warned that a housing market recovery may lead to an increase in the number of repossessions as lenders enforce suspended possession orders after the previous leniency that had given the indebted a temporary reprieve.