The CML ended 2008 with predictions of 45,000 repossessions, but have revealed today that there were only 40,000. Of these, 10,400 were repossessed in the fourth quarter.
The council says that the fact that there were 11 per cent fewer repossessions than expected demonstrates that mortgage lenders are making efforts to ensure that repossession is a last resort.
It has also revealed that by the end of 2008, around 182,600 mortgages – or 1.57 per cent of the total – had accumulated arrears equivalent to 2.5 per cent or more of the outstanding balance. This compares with 1.29 per cent, or 150,800 at the end of the third quarter of 2008, and 1.08 per cent or 127,800 at the end of 2007.
On a monthly basis, 219,100 mortgages were in arrears of more than three months at the end of 2008, up from 166,600 at the end of the third quarter of the year, and up from 127,500 at the end of 2007.
The CML warns that this figure cannot be read into too much because low mortgage rates at the back end of the year gave the sum of arrears a higher number of ‘months’ payments as interest rates fall. For example, someone with £2500 of arrears may have been two months behind at 7 per cent, but four months at 3.5 per cent.
CML director general Michael Coogan says: “Despite the upward pressure on mortgage arrears and repossessions arising from the problems in the economy and rising unemployment, both lenders and government are continuing to find more ways to help more people stay in their homes.
“But there seems to be a sharp rise in cases where borrowers are handing back their keys or abandoning their properties. We strongly urge borrowers to contact their lender and work with them before taking this step, as there may be other solutions. Borrowers are still liable for their debt, even if they leave the property, so working through their problems is much more likely to be in their best interests.”