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CML reports lowest number of repossessions since 2007

Published: 14 February 2013

The Council of Mortgage Lenders today reports a fall in the number of properties taken into possession by first-charge residential mortgage lenders from 8,200 in the third quarter of 2012 to 7,700 in the fourth quarter, maintaining a repossession rate of 0.07%. This is the lowest quarterly number since the fourth quarter of 2007.

On an annual basis, repossessions fell from 37,300 in 2011 to 33,900 in 2012 - the lowest annual figure since 2007. This brings the rate of repossession down from 0.33% in 2011 to 0.30% last year. The stock of properties in possession held by lenders at the end of 2012 was also at its lowest for over five years.

Chart 1: Number of properties taken into possession each year

Chart 1: Number of properties taken into possession each year

Source: CML research

The number of households experiencing mortgage arrears also fell. A total of 157,900 households ended 2012 with arrears of 2.5% or more of the mortgage balance, compared with 161,400 households at the end of 2011 (and 216,400 at the peak of the current arrears cycle at the end of the first half of 2009). This maintains the arrears rate at 1.4%, the same rate for the second consecutive year.

However, while the number of households in lower arrears bands has fallen fairly consistently since 2007, the number of cases in the highest band (arrears of more than 10% of the mortgage balance) increased slightly from 28,200 at the end of 2011 to 28,900 at the end of 2012.

Chart 2: Number of mortgages in arrears (by percentage of total balance)

Chart 2: Number of mortgages in arrears (by percentage of total balance)

Source: CML research

As we have previously cautioned, higher arrears pose the greatest challenges in terms of helping households to get back on track. Early arrears can often be resolved over a reasonable timescale, especially where communication is good, but this can be more difficult when arrears have accumulated or when the household's financial problems are long-lasting rather than temporary. Anyone facing the prospect of financial difficulty should contact their lender and take advice as soon as possible. As the statistics demonstrate, lenders try to keep borrowers in their homes and only take possession as a last resort.

CML director general Paul Smee comments:

"The fall in arrears and possessions is obviously very welcome. Households fall into difficulty for a variety of reasons, most of which cannot be anticipated. Wherever possible, lenders will work with borrowers to manage periods of temporary financial difficulty and enable them to keep their home. Anyone worried about their situation should talk to their lender, who will try to help them."

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. CML arrears and possessions figures relate to the UK as a whole. No breakdown of data is available for the regions or for individual countries within the UK.

3. CML arrears and possessions data for the first quarter of 2013 will be published on 9 May 2013.

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