Mortgage Repossessions Remain Lower than Expected

publication date: May 21, 2010
 | 
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books
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Mortgage Repossessions Remain Lower than Expected


Latest figures from the Council of Mortgage Lenders shows the number of mortgages in arrears and the number of repossessions both fell in the first quarter of 2010. The number of repossessions was 9,800, down from 10,600 in the previous quarter and 13,200 in the first quarter of 2009, while loans in arrears fell from 206,800 at the end of the first quarter of 2009 and 196,400 at the end of last year to 186,300 at the end of the first quarter of this year.

However, we all know the major reason for the lack of repossessions during this recession (45,000 in 2009 versus up to 85,000 a year in the 1990s) is due to artificially low interest rates and mortgage support from the government. As a result, CML continues to predict a high 53,000 repossessions for 2010.

CML says “This welcome decline gives no cause for complacency as a large number of households, who are just coping, still remain vulnerable to shocks that may arise from the economic uncertainty ahead” especially if they are civil servants of course!

Up until now many that have lost their jobs probably weren’t homeowners as it has mostly hit the private sector such as retail, catering etc. Now with pending government cuts, this could hit the property market hard, as many civil servants do tend to own property. Some areas which rely heavily on the civil service for employment (30% or more) could see a ‘double dip’ in property prices within the next 12 months, depending on the impact of the cuts.

So, if you are in an area heavily dominated by civil service and local authority employment, it’s worth waiting to see what happens to property prices over the next 12 months. If you are in an area of good employment in the private sector, prices are still likely to continue to rise as demand outstrips supply, and if you are in an area that isn’t recovering too well from the recession and unemployment continues to rise, then holding fire on buying might be the best option.

To find out what's happening in your local property market, read Kate's latest Property Market Update.

Take a look at our articles Top Tips to Avoid Repossesion and Top Tips to Stop Repossesion, plus our Selling a Repossession section.


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