Repossessions up 50% in a year

There were 12,800 repossessions by first-charge mortgage lenders (including 1,700 buy-to-let repossessions) in the first quarter of this year, according to the Council of Mortgage Lenders.

This is a rise of 23% on the fourth quarter of last year when there were 10,400 repossessions and a 50% increase from the first quarter of 2008 when repossessions stood at 8,500.

Although repossessions are still rising, the CML now thinks its 75,000 forecast for 2009 looks pessimistic, and expects to revise the figure downwards in its next housing market forecast update.

Arrears

Mortgage arrears continued to rise on all measures. The number of loans with arrears of more than 2.5% of the mortgage balance rose by 12% from 182,600 in the fourth quarter of 2008 to 205,300 in the first quarter of this year - 62% up on the 127,000 in the first quarter of 2008.

CML director general Michael Coogan said: "It is clear that mortgage arrears continued to increase. So did repossessions, but not as much as our 75,000 forecast figure for the year would suggest. So our forecast now looks pessimistic and we expect to revise it over the next month or so.

"Lenders genuinely want to help borrowers where borrowers are committed to working with them. It is quite clear that the number of arrears cases is rising far more markedly than the number of repossessions.

“Lenders are demonstrably increasing the forbearance they are offering, while many struggling borrowers have gained some breathing space through lower interest rates feeding through to lower monthly payments.

“The government has strengthened the benefits system, and while initiatives such as mortgage rescue and the home-owner mortgage support scheme are not appropriate for everyone, they have encouraged more borrowers to discuss their options with lenders and money advisers, which is helpful.”