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Arrears and repos at eight-year low

Arrears and repossessions fell to their lowest level since 1984 in the first six months of 2002, with only 6,850 properties repossessed, according to latest figures from the Council of Mortgage Lenders.

This figure is down by 35 per cent on the same time last year when 10,460 homes were repossessed.

The CML puts the drop down to a combination of low unemployment and interest rates and rising property prices producing a favourable environment for homeowners.

The number of mortgages which are three to six months in arrears fell to 73,660 from 90,490 in the first half of 2002 while the number of loans in arrears for between six and 12 months fell to 41,210 from 43,540 and over 12 months is down to 17,880 from 19,340.

But the CML warns the period of almost continuous improvement in arrears and repossession since the early 1990s is drawing to a close and tells borrowers not to be complacent.

It says anyone who has taken out a mortgage since 1995 gets no Government help with payments for nine months if they lose their job.

Director general Michael Coogan says: “The figures are a testimony to sustainable homeownership and the benign economic conditions. How- ever, the current volatility of the stockmarket makes the economic outlook more uncertain. Borrowers have enjoyed a long period of continuing improvement in arrears and possessions, which has been extended by low mortgage rates. But the trend could be reversed if we have rising unemployment in the next 12 months.”

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