Out of the 11.3 million outstanding first-charge mortgages in the UK at the end of March 2011, a total of 9,100 properties were taken into possession in the first quarter of 2011, according to new data published by the Council of Mortgage Lenders (CML). This represents 0.08% of all loans.
This was 15% up from the 7,900 in the fourth quarter of 2010 (the fourth quarter of the year typically sees a lower number), but 10% lower than the same period a year ago, and equal to the average quarterly number of repossessions throughout 2010.
The total number of mortgages in arrears also fell, and numbers decreased in all but the deepest arrears band. At the end of March, the number of mortgages with arrears equivalent to 2.5% or more of the outstanding balance showed an improvement to 166,900 (1.47% of all loans), just under 2% down from 170,000 (1.5% of all loans) at the end of December 2010, and an 11% improvement on the 187,300 (1.65% of loans) a year earlier. On this measure, the first quarter saw the lowest share of mortgages in arrears since the third quarter of 2008.
The CML said the only arrears band where a worsening was experienced was where arrears exceeded 10% of the mortgage balance. This band increased slightly in number, from 27,400 at the end of 2010 to 27,700, although the proportion of all loans was unchanged at 0.24%.
The CML’s current forecasts of 40,000 repossessions and 180,000 arrears cases of 2.5% or more at end-year already anticipate short-term pressure on household finances as a result of an expected squeeze on incomes.
The trade body believes that the prospect of low interest rates for a protracted period should limit the adverse impact on keeping up mortgage payments, despite the increased tax and inflation burden on households. However, the increased regulatory emphasis on prudential issues, including the FSA’s concerns that “excessive”” forbearance may be storing up future problems
