Landlord Basics

Property Repossessions Fall

According to the Council of Mortgage Lenders the number of property investments facing repossession has dropped for the third quarter in a row.

Only 9,400 properties were seized by lenders between the months of April, May and June – 400 less than at the beginning of this year, and 2,700 fewer than their 12,100 peak in September 2009.

But this is not the only area to witness falls:

• The number of homeowners who have fallen into mortgage arrears has dropped by 5% during April, May and June to 178,200 homes
• The number of possession claims issued by mortgage lenders has dropped by 5% to 17,774
• The number of claims granted by the courts has dropped by 7% to 13,389 compared to the beginning of the year

However, despite all these clear signs of improvement, property advisors are still dubious about whether property repossessions will continue to fall…

Although, fewer homeowners have witnessed mortgage difficulties compared to the recession of the 1990’s as well as compared to what was previously predicted earlier this year; rising interest rates, growing unemployment and decreased mortgage assistance from the government could tip the scale.

Currently property advisors believe only 39,000 properties will be repossessed by the end of this year, instead of 53,000. However, this could all change depending on how much homeowners are in arrears.

As we speak, homeowners (in arrears) can be split into 2 groups: those who have the lowest levels of arrears (where they have fallen behind with their payments by 1.5%-2.5% of their outstanding loan) and those who have the highest levels of arrears (those who have fallen behind with their payments by 10% of their outstanding loan).

As it stands 80,100 properties across the UK belong to low arrears property owners, whilst 26,400 belong to high arrears property owners.

Yet, should interest rates rise as predicted and government support weaken, many of these property owners could face losing their homes.

Related posts:

1. Property Repossessions Continue to Fall
2. Social Housing To Fall 65%
3. Student Housing Supplies Fall Short
4. Looking For A Bigger Property?
5. Homeowners Witness 6% Property Cost Drops

Tags: property advisors, property investments, property owners, property repossession

This entry was posted on Friday, August 13th, 2010 at 7:53 am and is filed under News, repossessions. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.