Repossessions only 'tiny fraction' of mortgages

08-Feb-2008

First-time buyers who are apprehensive about being able to afford repayments on a first property may be relieved to know that repossessions only represent a fraction of the mortgage market.

New data has shown that, at 0.23 per cent of all mortgages, the repossession rate is less than half that recorded throughout the first half of the 1990s.

The Council of Mortgage Lenders (CML) predicted that 2007 would see around 30,000 repossessions, but the actual figure stood at 27,100 – some ten per cent below expectations.

Commenting on help available to homeowners, Michael Coogan, CML director general, said: "Lenders take their responsibilities to borrowers facing repayment difficulties very seriously, and many go to exceptional lengths to provide debt counseling, reschedule payments, extend loan terms, or in some circumstances even allow payment breaks."

He stressed that lenders are likely to "abandon" repossession activity up until the last minute if an agreement can be reached, which could be reassuring to nervous first-time buyers.

In related news, the CML has said that it welcomes the Monetary Policy Committee's decision to cut the base rate to 5.25 per cent.

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