Forecasts that there will be 40,000 repossessions this year now look over-egged.
The Council of Mortgage Lenders says that arrears are continuing to fall and that repossession numbers are stable.
Reporting on the third quarter, the CML said the number of properties taken into possession by mortgage lenders was 9,200, fractionally up on 9,100 in the second quarter.
The number of repossessions in the quarter equated to 0.08% of all mortgages. This has been the same for five of the last six quarters, with the exception of Q4 2010, which experienced a typical seasonal dip to 0.07%.
So far this year, a total of 27,500 properties have been taken into possession.
This is 4% fewer than in the same period last year.
There was also a slight fall in the number of households in arrears, according to the CML.
At the end of September, the total number of mortgages with arrears of 2.5% or more of the outstanding balance fell to 161,600 (1.44% of all loans), down 2% from 165,200 (1.47% of all loans) and 8% lower than the 175,100 cases (1.55% of all loans) at the end of September 2010.
Despite these improvements there is still a stock of cases with significant arrears: 27,300 loans have arrears of more than 10% of the outstanding balance.
CML director general Paul Smee said: “The fall in the number of mortgages in arrears, and the stable picture on repossessions, are testament not only to the beneficial effects of low interest rates, but also to effective arrears management, and good communication between lenders, borrowers and debt counselling organisations.
“Against the backdrop of widespread financial uncertainty sweeping both the UK and the wider European economies, it is impossible to be sanguine about the future influences that households may face.
“But lenders will do their utmost to help borrowers keep their homes, whatever pressures emerge. These figures firmly show that repossession does not have to be an inevitable consequence of mortgage arrears.”
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Comments
rant: " there are EAs posting on this site today saying that they are advising their children to wait for lower prices. Are you going to debate your points with them too?"
You may recall, matey, that this very subject came up several months ago and I got into a 'handbags at dawn' with Ms Andaluza and the aptly named FF-S.
So - at the risk of getting my danglies chewed once again (...for all you know I might just be beginning to enjoy it... ;o) ), I will repeat my original stance on the subject and throw it open for debate.
An Estate Agent has a duty of care, first and foremost, to their client(s). In other words, the vendor of the property. Therefore, they must do the best they can in order to achieve a sale, at the best price, in the shortest timeframe.
They also, however, have a LEGAL requirement to the buyer of the property under Acts such as the PMA not to knowingly misdescribe the property, or mislead the buyer in any way.
They SHOULD, also, have the courage of their convictions. If they would sell 27 Acacia Avenue to Jo Public; then they should also have no hesitation in selling 27 Acacia Avenue to one of their own. If they advise a family member not to buy - then they shouldn't be selling.
I would never advise someone to do something I would not do myself; or ask someone I am connected with to do. As you know, I have two sons who would gladly make an offer on a property tomorrow. Unfortunately (yes, unfortunately...), they cannot afford to do so - but if they WERE in that lucky position, then I would be there driving them forward. Don't forget, rant - I believe in HOME OWNERSHIP, not PROFIT FROM PROPERTY, and have done for over three decades.
You see, Estate Agency is not selling (shock...horror!). It is matching buyer with property... helping buyers to make an informed decision... the rest sounds even more lame - but it is true. In all the time that I have dealt with property sales I have handed THOUSANDS of keys over to new owners - but I have not really 'sold' the house to any of them, as the house 'sells' itself. THAT is why I jump on the back of those who blame Agents for the state of the market and the prices that properties sell for. To the best of my knowledge, never has a buyer been held at gunpoint by an Agent until they sign a legally binding Contract to purchase a property!
I would like to think that those Agents who regularly post on here - the ones who have a real passion for the job - would agree with me that if Jo Public walked into their office three weeks after collecting the keys of their new home andannounced they hate it and want to sell it straight away, that the first thing that passes tghrough their mind would be "...what a shame..." rather than "YES!! Another instruction!"
So - come on, folks - am I right... or WAY off base?
That pub I was talking about is down to £220K today. That's approaching a 50% crash this year...
; )
Re talking the market down - there are EAs posting on this site today saying that they are advising their children to wait for lower prices. Are you going to debate your points with them too?
I'd say this was a balanced article - alternating between good and bad news (or bad and good news, depending on your points of view).
The total of repos for this year looks likely to end up slightly less than expected, but the numbers did tick up in the last quarter.
The number of households in arrears has fallen a little, but there are still significant numbers who are quite a bit behind with payments.
To date, lender forbearance has kept people in their homes, but the crisis in the Eurozone could have an impact on that in the future.
NOMINAL prices haven't fallen as much as the last crash, so FTBers etc aren't in a position to benefit. REAL prices are however falling about as fast as they did at this stage of the last crash - it's mostly the investment types that are losing out. If nominal prices continue to go down though, those that are jumping into BTL now will find younger people are able to buy rather than rent.
Oh you make me laugh usind the DCLG data, when last month you were standing behind something the Halifax printed, (0.3% fall in September) now the Halifax reports a 1.2% increase in October, to fail to mention the Halifax this time and look for someone else to say that prices have fallen!!
http://www.ft.com/cms/s/2/f84890fe-0943-11e1-8e86-00144feabdc0.html#axzz1dp2Pa0oz
Rant, just think how bad it would be if they put every repo on the market for next to nothing!
Compared to the last crash, prices haven't fallen anywhere near as much.
I am sure that if the lenders are employing this strategy for commercial properties, they are doing the same with residential properties too.
Anyone holding onto a property would I am sure welcome any strategy that keeps property prices from falling faster, though I accept that people such as yourself who is waiting to buy a property, would be as frustrated as hell. Lol.
We are also selling some properties where the vendors have fallen behind in their payments, but are now sold. A letter from their solicitor to inform the lender that a sale is in fact taking place has bought the vendor many months of time for us to get the sale through.
Other vendors trying to sell are paying a token £20 per month towards their mortgage, thus showing that they have not given up on their responsibilities. This tiny amount of money has effectively extended their time in the property by months/ years before any serious threat of repossession.
Some vendors have been given permission to rent their properties out instead of having to take out a BTL mortgage and they have moved in with family covering the majority of the mortgage from the rental income.
Basically the banks have wised up in this market compared to the last. Everything is much more controlled this time round this allows people to react in a more considered way, as apposed to the panic of the late 80's & early 90's.
Carry on trying to talk the market down why don't you, but try reading the article again at the top.
Only 0.08% of all mortgages were repossessed in the last quarter, the same over the previous 5-quarters. I make that 0.32% of all mortgages are being repossesed over a 12-month period. One third of a percent! That is nothing. There have always been repossessions even in the boom days!
This is a good report that says that the lenders are doing a great job keeping people in their homes, while at the same time preventing property prices from collapsing even faster. Only a HPC member would try to knock some good news like this! ;-)
I'll wait for you to prove my point, again!
Not sure of the point trying to be made. There's a repo pub I pass from time to time that started the year on £425K and is now on for £260K. To quote Pee Bee "SO WHAT"? The final line of this article talks about keeping people in their homes, not in pubs.
Any efforts to prop up the market in Peterborough are clearly failing. Down over 5% in the last 12 months according to the Land Reg, twice the rate that prices are declining nationally. Of course, that's a decline of over 10% in real terms.
I see that the DCLG data out today reports prices nationwide were down another 0.7% in September too...
Chris – how very dare you!!!! that pillock rantrave (and his fellow idiots) will be most unhappy when he comes home from school and reads your post!
"lenders will do their utmost to help borrowers keep their homes, whatever pressures emerge."
This is great news and should shut some of the HPC doom mongers up for a while!
The lenders have learned from the 80's/ 90's crash that repo'ing everyone and flooding the market with ever cheaper repo properties will drive property prices lower & lower helping no one.
I am seeing lenders mothballing repo properties instead of putting them on the market at silly low prices. We had a repo Pub that wouldn't sell just south of Peterborough. After rejecting several offers, the bank simply withdrew it from the market, boarded it all up and it has sat their quietly for over a year now, with only a weekly visit by their security team to check it is okay. A few years down the line when prices have recovered again, will it come back to the market again I'm sure! :-)
I have got to take my hat off to the lenders this time round. They are protecting the market in the same way the Dutch protect the diamond prices. Maintaining the level of supply to keep things more stable. :-)
The only people losing out are the first time buyers or other buyers not selling and trying to buy ultra cheap! Oh well, pretend cry!! ;-) Lol.
The interest rate to watch these days is not the Bank of England's, but LIBOR. That is the rate which banks charge each other to borrow money. If that goes up (which it has re the crisis in the Eurozone) then as night follows day, mortgage rates will increase.
Their predictions are so far off as there has not been the interest rate rise that was expected by many, watch out if and when they start creeping up. Mind you the CML have never got it right in recent years.
The end of the year, I believe, will also see applications for the Support for Mortgage Interest Scheme close. It will still take a further two years for this benefit to work it's way out of the system. SMI is currently keeping 300,000 families in properties they can no longer afford due to changes in working circumstances, so this will be a big change.
Meant to add anyone care to guess what the average mortgage balance o/s is these days? I'd say it is probably at least £30K given the average loan taken over the past 5 years has been probably well in advance of £100K and has thus skewed what would have been previously a much lower figure.
That skewed effect will also impact on the average balance o/s plus the majority of loans at the moment are probably on an interest only basis.
But let's be optimistic and say it is only £30K as higher figure4s just make everything much worse!!
Given that the monthly payment on £30K would be £125 at say 5% interest rate that is an awful lot of missed payments if there is £3000 (10%) arrears.
Rant you are dead right
10% less than projected by looks of it, better than 10% over but just watch the figures this time next year and, sadly, the year after. There are still a lot of 5 year fixes to come to an end over next 18 months, and if interest rates do ever rise...............
"Despite these improvements there is still a stock of cases with significant arrears: 27,300 loans have arrears of more than 10% of the outstanding balance."
The little boy is going to need more than one finger in the dam soon.