The number of properties taken into possession in Q4 2011 totalled 8,500, 5 per cent higher than the 8,100 homes repossessed in the same period in 2010, according to data from the Council of Mortgage Lenders.
However, the number of repossessions in Q4 2011 marks a 9 per cent fall on the 9,300 properties repossessed in the previous quarter.
The number of properties repossessed in 2011 as a whole was 36,200, or 0.32 per cent of all loans, down from 37,100 repossessions at 0.33 per cent of all loans in 2010.
The figures also show that there continued to be a modest improvement in arrears across all bands in Q4 2011, and in 2011 as a whole compared to the previous year.
At the end of 2011, 159,400 mortgages had arrears equivalent to 2.5 per cent or more of the mortgage balance, down by 7.5 per cent compared to the 172,400 mortgages in arrears 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 per cent in 2011 – 0.31 per cent on owner-occupied properties, and 0.42 per cent on buy-to-let. This compares with an overall rate of 0.33 per cent in 2010 – 0.32 per cent on owner-occupied properties, and 0.36 per cent on buy-to-let.
However, in terms of arrears the buy-to-let sector outperformed the owner-occupier sector.
While the three months arrears rate stood at 1.98 per cent of all mortgages at the end of 2011, the proportion was higher among owner-occupiers at 2.06 per cent than among buy-to-let mortgage holders, which stood at 1.38 per cent if receiver of rent cases were excluded and 1.79 per cent if included.
The CML says that although arrears and repossessions throughout 2011 were fairly stable, it has no current plans to revise its forecasts for 2012.
It says that worsening unemployment levels and continuing pressures on the cost of living are likely to result in a further deterioration on household finances this year, with repossessions expected to total 45,000, up 24 per cent on 2011’s total.
The CML also expects there to be 180,000 mortgages in arrears of 2.5 per cent or more by the end of the year.
CML director general Paul Smee says: “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.”