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Repossessions much lower than predicted

Repossessions were 15 per cent higher in 2009 than the year before but significantly lower than the Council of Mortgage Lenders’ forecast earlier in the year.

After forecasting 75,000 repossessions in 2009, the CML reveal that the number of repossessions totalled 46,000, compared to 40,000 in 2008.

The CML have predicted 53,000 repossessions in 2010, due to the uncertain economic and political outlook and the possibility that interest rates might rise sooner than expected.

CML figures show that 188,300 mortgages ended the year with arrears equivalent to at least 2.5 per cent of the outstanding mortgage balance, which is lower than the 195,000 that the CML anticipated. They predict 205,000 arrears cases in 2010.

CML director general Michael Coogan says that 2010 will be a challenging year for households and that they should seek advice if things start to get out of control.  

He says: “The fact that mortgage arrears and possessions did not rise as much as we feared in 2009 is testament to the effect of low interest rates, and a great deal of concerted effort by lenders, government and the advice sector to help borrowers to address financial difficulties when they occur.
 
“We are not out of the woods yet – 2010 will still be a challenging year for many borrowers, and some households will inevitably find their finances being squeezed if and when interest rates do eventually rise. But borrowers should feel reassured that lenders want to help them keep their homes wherever possible. The vast majority of people who get into arrears manage to keep their homes, and will do so even if interest rates rise. Seeking advice as soon as financial problems occur will help to minimise the risk of the situation getting out of control.”

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