Repossessions lowest for over two years

A total of 9,978 properties were repossessed by lenders during the three months to the end of June, 5% fewer than the first quarter and the lowest since the beginning of 2008, the Financial Services Authority says (see the Mortgage Arrears and Redundancy Help guides).

The downward trend looks set to continue, with the number of people who fell behind with mortgage repayments falling for the sixth consecutive quarter during the period.

Around 37,200 people got into mortgage arrears during the three months, 8% fewer than the previous quarter.

The overall number of people in arrears of more than 1.5% of their outstanding mortgage also continued to fall, dropping to 351,100, or just over 3% of all mortgages.

Forecast slashed

The figures are in line with those reported by the Council of Mortgage Lenders last month, which showed the number of homes repossessed fell to 9,400 during the same period (see the Repos down MSE News story).

The drop led the CML to slash its prediction for repossession numbers for the whole of 2010 to 39,000, down from its previous estimate of 53,000.

The FSA's figures are higher than the CML's as they include loans where your home is used as security for the lender if you don't pay, and mortgages from non-CML members.

Repossession levels have remained lower than expected during the economic downturn due to a combination of low interest rates, Government support schemes and increased forbearance by lenders.

Lending up

Today's figures from the FSA also show mortgage lending levels increased during the second quarter following a subdued start to the year.

Total advances reached £36.5 billion during the period, up from £32.1 billion in the three months to the end of March.

Further reading/Key links

Mortgage cost-cutting guides: The Remortgage Guide, First-time Mortgage Guide, Cheap Mortgage Finding, Ditch My Fix? Get help: Mortgage Arrears, Redundancy help