An increase on mortgage repossession

31/01/2007

In the first six months of 2006 mortgage repossession rose from 8,140 to 8,860 towards the last six months of 2006. These figures were put forward by the Council of Mortgage Lenders.

CML feels that there will be short-term arrears to increase in 2007; this is due to interest rates rising. People will feel the change more in the last six months of 2007, as interest rates take time to get processed through into repayment situations for borrowers. Lenders and Borrowers will try their best to sort out any short-term payment problems without this becoming a long-term arrears case.

“The arrears picture at the moment is fairly complex. On the one hand, the wave of problems caused by previous interest rate rises has now worked through, so recently arrears levels have fallen. On the other hand, interest rates are rising again, and payment shock may be an issue for some this year as their existing fixed or discounted deals expire.

"Overall, we expect the total number of mortgages at least three months behind with their payments to rise from around 105,000 last year to 130,000 this year, before falling back again to 120,000 next year.

Repossessions are likely to creep up from around 17,000 last year to 19,000 this year and 20,000 next year - higher than the low of 6,030 in 2004, but still only around a quarter of the 1991 peak of 75,540. Since 1991, we have also gained an extra 1.9 million mortgages in the market." Said Michael Coogan, CML Director General.

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