Home repossessions down year-on-year
The number of homes repossessed this year is 7% down from a year ago, according to data from the Council of Mortgage Lenders (CML).
A total of 9,000 homes were repossessed in the second quarter of the year, a fraction down on the 9,100 from the first quarter.
The number of mortgages in arrears also saw little change in the second quarter.
From today's data, the CML has said it won't be making any changes to its arrears and possessions forecast for the rest of the year. It still predicts there will be 40,000 homes repossessed for the whole of 2011 and 45,000 in 2012.
It also suggests there will be 180,000 mortgages in arrears of 2.5% of the balance or more this year.
Paul Smee, CML spokesperson, says today's report is positive as mortgage repayment problems have recovered against a current backdrop of stable employment and low interest rates.
"Despite current uncertainty in financial markets, we see no need to revise our forecasts. Anyone with debt worries should take advice and speak to their lender at the earliest opportunity, as most temporary financial problems can be resolved.
"It is clear from the low rate of repossession that lenders do want to keep people in their homes, and are successfully doing so in the vast majority of arrears cases. Repossession really is seen as a last resort," he says.
Gillian Guy, chief executive of the Citizens Advice Bureau, says with the cost of living going up daily and incomes lagging badly behind, mortgage lenders and the government must focus on helping people stay in their homes.
"Repossession is a terrifying prospect and should always be the last resort. Anyone struggling to meet their mortgage repayments has a greater chance of staying in their home if they seek advice and take action as soon as they are having problems," she adds.
Are you struggling to pay back your mortgage? Read the advice our experts gave to one Moneywise reader at risk of losing his home.
A homeowner’s worst nightmare; repossession is an action of last resort by mortgage lenders to recover money from borrowers that have failed to keep up with repayments on their mortgage or other loan secured on their home (see secured loan). Repossession is a legal procedure that has to go through several processes before the homeowner is evicted and the property reposed. These are: if a borrower keeps defaulting; the lender applies for a solicitor’s notice; the lender instigates possession proceedings through the court; at the court hearing a possession order is granted and sometimes a possession warrant; a bailiff is appointed and an eviction notice issued at which point the homeowner has two to three weeks to vacate the property.
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).
“Arrears” tend to be associated with debt. If you fall behind and miss payments on any outstanding debt, the amount you failed to pay is an arrear – the amount accrued from the date on which the first missed payment was due.