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HOME REPOSSESSIONS AT TWO-YEAR LOW (News (General))
by administrator 
, Wednesday, June 30, 2010, 06:47
The number of people who lost their home fell to a two-year low during the first quarter of the year, new figures have shown.
A total of 10,500 homeowners had their property repossessed during the three months to the end of March, 11% fewer than during the previous quarter, according to the Financial Services Authority. There was also a drop in the number of people who fell behind with their mortgage during the period.
Around 40,500 people got into arrears during the first quarter, 2% fewer than during the previous three months. The fall contributed to a further improvement in the total number of people who were in mortgage arrears for the third consecutive quarter, with 362,000 behind on their home loan, the equivalent of 3.23% of all mortgage holders.
The figures are in line with ones published by the Council of Mortgage Lenders for the same period, which also showed repossessions had fallen to a two-year low of 9,800. The FSA's figures are higher than the CML ones, as they also include second-charge mortgages and loans advanced by lenders who are not CML members.
Repossession levels have remained lower than expected during the economic downturn due to a combination of low interest rates, Government support schemes and increased forbearance by lenders.
The CML had previously forecast that 53,000 people would lose their homes this year, however it has indicated this prediction now looks "pessimistic" and is likely to be revised down.
The figures from the FSA also showed there had been a steep fall in mortgage advances in the first quarter as activity in the housing market stalled due to a combination of bad weather, the end of the stamp duty holiday and uncertainty caused by the general election. New advances in the first three months of the year totalled just £32 billion, 22% lower than during the previous quarter.
Despite signs that lenders were loosening their lending criteria and making more products available for people with small deposits, only 2% of new advances went to people borrowing more than 90% of their home's value - unchanged for the third consecutive quarter.
A spokeswoman for the Department of Communities and Local Government said: "Thje figures from the Financial Services Authority show that the threat of repossession remains very real for the country's homeowners. That's why Housing Minister Grant Shapps is conducting a review of existing Government schemes to help homeowners struggling to pay their mortgage and make sure they offer the best deal for homeowners and taxpayers alike."
