CML reports repossessions stable, arrears falling
Published: 10 May 2012
The number of repossessions in the first quarter of 2012 was 9,600, the same as in the first quarter of 2011, breaking the recent trend of year-on-year increases in repossessions, according to the Council of Mortgage Lenders.
Repossessions in the first quarter were higher than the 8,700 that took place in the fourth quarter of 2011, but this represents a normal seasonal pattern. Overall, the repossessions landscape appears stable for the time being.
Number of properties taken into possession
Through the first quarter of the year, there was a modest improvement in the total number of mortgages in arrears. The number of mortgages with arrears of 2.5% or more of the outstanding balance fell to 157,800 (1.4% of all loans), down from 160,300 at the end of December 2011 and 170,500 at the end of the first quarter of 2011.
Within the total number of arrears cases, the largest improvements were in the middle arrears bands. Year on year, the number of loans in the 5-7.5% arrears band fell by 12%, and reached its lowest number since the fourth quarter of 2008, while the number in the 7.5-10% band fell by 13% to its lowest since the third quarter of 2008. The only arrears band to show a year-on-year increase was the group of loans with arrears of 10% and over, with the 28,000 loans in this category, 300 higher than a year earlier, representing the highest number since June 2000.
Number of mortgages in arrears
The 45,000 central forecast for repossessions in 2012 may be revised down when the CML publishes revised housing market forecasts later in the summer. However, continuing pressures on household finances, changes to welfare benefits, and an upward drift in mortgage rates all have the potential to disrupt the current stable picture.
Paul Smee, CML director general, comments:
"Combined efforts by borrowers, lenders and money advisers are ensuring that payment difficulties are being managed effectively, with the result that the number of repossessions remains relatively low. Repossession really is a last resort, as the numbers show. Anyone worried about their mortgage should be assured that lenders will try to help them get back on track, as long as this is a realistic prospect."
Notes to editors
1. The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 95% of all residential mortgage lending in the UK. There are 11.3 million mortgages in the UK, with loans worth over £1.2 trillion.
2. A technical reporting issue has resulted in an apparently higher number of cases in the 10%+ arrears band in the fourth quarter, but this is purely the result of a lender's change in reporting practice; if practice had not changed the number would be lower than in the previous quarter.
3. CML arrears and repossessions figures relate to the UK as a whole. No breakdown of data is available for the regions or for individual countries within the UK.
4. CML arrears and repossessions data for the second quarter of 2012 will be published on 9 August 2012.