CML: 2011 repossessions lowest since 2007

Thursday, 9 February 2012 9:44 AM

The total number of properties taken into possession by first-charge mortgage lenders in 2011 was 36,200, according to new data from the Council of Mortgage Lenders. This was the lowest annual total since 2007.

For the fourth quarter of 2011, the period for which new data is available, the number of repossessions was 8,500 - nearly 9% down from 9,300 in the third quarter, but 5% up from 8,100 in the fourth quarter of 2010.

Mortgages taken into possession, %

Source: CML data

On arrears, there continued to be a modest improvement across all arrears bands (see note 2) in the fourth quarter, and in 2011 as a whole compared with the previous year. At the end of 2011, 159,400 mortgages had arrears equivalent to 2.5% or more of the mortgage balance, 7.5% down from 172,400 at the end of 2010.

Buy-to-let properties accounted for 5,900 of the repossessions in 2011, up from 4,700 in 2010. The overall repossession rate was 0.32% in 2011 - 0.31% on owner-occupied properties, and 0.42% on buy-to-let. This compares with an overall rate of 0.33% in 2010 - 0.32% on owner-occupied properties, and 0.36% on buy-to-let.

The higher repossession rate on buy-to-let is not reflected in the arrears experience, however, with the buy-to-let sector experiencing a lower level of arrears than the owner-occupier sector. While the 3 months arrears rate stood at 1.98% of all mortgages at the end of 2011, the proportion was higher among owner-occupiers (2.06%) than among buy-to-let mortgage holders (1.38% if receiver of rent cases were excluded; 1.79% if included).

Mortgages more than three months in arrears, %
 

Source: CML data

Although arrears and repossessions throughout 2011 were fairly stable, the CML has no current plans to revise its current 2012 forecasts for the year. Worsening unemployment and continuing pressures on the cost of living seem likely to result in some further deterioration in the position of households in 2012. The CML anticipates that this is likely to result in around 45,000 repossessions and around 180,000 mortgages in arrears of 2.5% or more by the end of the year.

CML director general Paul Smee said:

"Low interest rates and good arrears management by lenders are helping the vast majority of those borrowers who face difficulties to keep their homes and get back on track. This will continue, but in the face of wider economic difficulties and rising unemployment, we are concerned that there will be a higher number of people facing more serious problems in 2012.

"Anyone worried about their finances should talk to their mortgage lender and take advice on their other debts as soon as possible. This will give them the best possible chance of staying in their home even if they have a spell of financial difficulty. Forbearance cannot be indefinite; but for most households arrears are temporary and can be resolved."

DOCUMENTS ATTACHED

AP1 - Arrears on mortgages, by number of months in arrears
AP2 - Arrears on mortgages, by percentage of total balance in arrears
AP4 - Possessions on mortgaged properties
AP5 - Buy-to-let mortgage arrears and possessions
AP7 - Arrears, buy-to-let and wider mortgage market
AP8 - Possessions, buy-to-let and wider mortgage market


NOTES TO EDITORS

1. The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 94% of all residential mortgage lending in the UK. There are 11.2 million mortgages in the UK, with loans worth over £1.2 trillion.

2. A technical reporting issue has resulted in an apparently higher number of cases in the 10%+ arrears band in the fourth quarter, but this is purely the result of a lender's change in reporting practice; if practice had not changed the number would be lower than in the previous quarter.

3. CML arrears and repossessions figures relate to the UK as a whole. No breakdown of data is available for the regions or for individual countries within the UK.

4. CML arrears and repossessions data for the first quarter of 2012 will be published on 10 May 2012.

5. If you are unable to view the two charts in this press release, please see the online version of this press release on the CML website.


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Bernard Clarke - 020 7438 8923
Jayne Walters - 020 7438 8922

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• home owners
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• homelessness
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• repossessions