Repossession rate slowing down

Friday, 14 August 2009 12:00 AM

By Liz Stephens

The number of homes that were repossessed in the last quarter fell ten per cent compared with the previous three months the Council of Mortgage Lenders (CML) has said.

However, the rate of repossession is still 14 per cent higher than the same period the previous year.

The Council recently revised down its estimate for repossessions in 2009 by 10,000 to 65,000 homes.

CML's head of policy Jackie Bennett said: "With unemployment rising and the economy still weak, the outlook will remain challenging for the rest of this year and into 2010."

However, separate figures from the Ministry of Justice gave a hint of a future rise in repossessions in England and Wales.

The number of repossession actions started in the courts bounced back in the second three months of the year, rising by 10 per cent compared with the first three months of the year to 26,419.

The number of repossession orders granted by judges also rose over the same period, up 16 per cent to 19,123.

Low interest rates have meant that fewer homeowners are falling behind with their mortgage payments.

Housing crisis charity Shelter fear a rise in repossessions when interest rates begin to rise again.

A spokeswoman for the charity said: "Shelter fears a second, more devastating tidal wave of repossessions is coming as unemployment continues to rise, the recession deepens and at some point, interest rates begin to climb again."

Meanwhile Liberal Democrat housing spokesperson, Sarah Teather said: "A second wave of repossessions is a real possibility.

"We need to see some long-term planning from ministers, otherwise a perilous combination of high unemployment, rising interest rates and the end of the Government's time-limited housing schemes could mean disaster for many families."

To date, only six families have participated in the governments' mortgage rescue program in England.

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• economy
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• economy and finance
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• recession