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Repossessions are lowest for 20 years

Arrears and repossessions have fallen to their lowest levels for 20 years, with only 0.11 per cent of all borrowers repossessed by lenders last year, according to the Council of Mortgage Lenders.

Its latest figures reveal that 11,970 properties were repossessed last year compared with 18,280 in 2001.

Only 50,510 mortgages were in arrears for more than six months in 2002 compared with 62,840 in 2001.

But the CML warns that arrears and possessions reflect recent benign conditions rather than the possibility of future uncertainty in the housing market.

It is encouraging borrowers to take out mortgage payment protection insurance, critical-illness cover or income protection. The aim is to keep the average annual number of possessions below 30,000. The The average over the last 10 years has been 35,000.

The CML admits this will be a challenge, given the reduction in state assistance for homeowners since 1995, which means borrowers have to wait nine months to claim income support for mortgage interest.

Deputy director general Peter Williams says: “One borrower in 1,000 suffered repossession last year compared with around one in 130 at the worst point of the cycle in 1991. This is an excellent achievement by the industry although we would like to see even more people secure in their homeownership.”

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