Low interest rates have meant that the number of UK repossessions fell for the fourth consecutive quarter, according to the Council of Mortgage Lenders. In Q3, banks repossessed 27% (8,900) fewer homes compared to the same period last year and 5% less than in quarter 2.
Michael Coogan, the director general of the CML, said that even despite the economic crisis and the probability that the recovery will be slow, contractor mortgage payment problems have been kept in check so far. Low interest rates and the commitment of lenders, borrowers, debt advisers and the government have all attributed to this. However, we must not take the situation for granted and the trend could still reverse.
Mervyn King, the governor of the Bank of England, said that the UK’s recovery will continue but because the base rate has been kept at a historic low there could be risks to the economic growth.
The CML had predicted that 39,000 homes would be repossessed this year and in the first three quarters of the year there had been 28,400.
However, a separate report from the UK Ministry of Justice showed that the amount of applications for repossession made to English and Welsh courts rose by 4% in quarter 3. A total of 18,931 applications were made although this was a drop of 19% from the corresponding quarter last year. There was a 5% rise in the number of claims that led to a possession order being granted, a 28% fall on the year.
Despite this, over half a million families in Scotland are worried about losing their homes, according to research from Shelter. One in three UK homeowners is currently concerned about their mortgage payments and one in six is already having problems meeting their repayments every month.
The situation in Scotland is actually thought to be slightly better than in the rest of the UK as house prices are lower and people tend to borrow a lower proportion of their income from mortgage lending companies.
© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.
