Home repossessions fell by 24% in UK during 2010
- Published on Thursday, 10 February 2011 10:21
- Written by Scott Buckler
The number of homes repossessed in the UK last year dropped by 24% to 36,300, the Council of Mortgage Lenders (CML) has saidThe number of people in arrears by 2.5% or more of their outstanding loans also fell last year, by 13% to 169,600.The continued low level of interest rates has helped many home owners in financial difficulties.
However, the CML repeated its warning that arrears and repossessions may rise this year.
"As we go through 2011, the number of people facing payment pressures may increase if interest rates rise, and as a result of the spending cuts that have resulted in reductions in the level of public support available," said the CML's director general Michael Coogan.
"We will be monitoring developments closely, but at present we continue to expect the number of arrears and repossessions to be in line with our forecasts of 40,000 repossessions and 180,000 arrears cases as at the end of 2011."
As well as the possibility of higher interest rates, the CML pointed to other potential pressures on people struggling with their mortgages.
The government Support for Mortgage Interest scheme, aimed at subsidising the interest payments of mortgage holders who become unemployed, now pays interest at 3.63%, rather than the previous rate of 6.08%.
"Anyone who is worried about being unable to pay their mortgage should contact their lender and seek advice at an early stage from Citizens Advice, Shelter, National Debtline or other local advice agencies," said Mr Coogan.
The number of repossessions has been falling for more than a year and the 7,900 drop in the last quarter of 2010 was the fifth quarterly fall in a row.
With many people enduring pay freezes while the rate of inflation rises, and unemployment expected to increase due to government spending cuts, many experts believe some mortgage holders could quickly be tipped over the edge.
"When rates do rise, and inflation may force the Monetary Policy Committee's hand sooner rather than later, the number of repossessions and people in arrears could spike sharply," said David Birne, insolvency partner at chartered accountants HW Fisher.
Source: ©BBC News