Figures from the Council of Mortgage Lenders (CML) indicated that the number of homes repossessed in the UK in 2011 fell to their lowest level since 2007.
The CML had previously predicted that there would be 40,000 repossessions but the figures show that only 36,200 homes were repossessed. These figures also represented a fall of around 2.5% from the 37,100 repossessions in 2010.
Many lenders are helping to keep the number of repossessions low by being more lenient. This leniency, combined with low interest rates, has been cited as the main reason for a drop in repossessions.
The number of house purchases is also still at a low level and is predicted to fall further in 2012.
Analysts believe this could leave many people trapped in a mortgage they cannot afford.
The CML figures indicated that 8,500 homes were repossessed in the final three months of 2011. These figures were 9% down on the three months before, but they were also 5% up on the final quarter figures of 2010. This has led to some concerns that repossessions are starting to rise again. The CML also warn that high unemployment will also cause more strain on homeowners and cause mortgage arrears, although mortgage arrears have also fallen since 2010.
The CML forecast for repossessions in 2012 is 45,000 homes. However, they are keen to point out that this is still much lower than the peak of over 75,000 homes repossessed in 1991.
Paul Smee, from the CML, said: “Anyone worried about their finances should talk to their mortgage lender and take advice on their other debts as soon as possible. This will give them the best possible chance of staying in their home even if they have a spell of financial difficulty.”
According to figures from the Ministry of Justice, there were also nearly 18,000 repossession claims in the last three months of 2012. This was also up on the figures from the three months before.
Out of the 18,000 claims, under 14,000 ended up with a repossession order and this was down on the figures for the three months before. Again, leniency has helped many stave off repossession and about half of the repossession orders have been suspended, allowing debtors more time to meet their repayments and pay off arrears.
However, the CML have indicated that the leniency on mortgage arrears hasn’t been applied as much in the buy-to-let mortgage sector. Repossessions do not impact on tenants rights, and as such, lenders are less inclined towards sympathy for the landlords. Repossessions in this are are higher, but the CML also indicate that arrears are also lower.
About 4 in every 1000 properties on a buy to let mortgage were repossessed in 2012, just under 6,000 in total. By the same token only 3 in every 1000 owner occupied properties were repossessed.