Last week, the regulator revealed that repossessions fell by 9% in the second quarter of the year. Lenders seized 13,610 homes from April to the end of June, compared to 14,884 in the previous quarter. While the figure is still 23% up on the second quarter of 2008, it still represents a significant improvement on previous expectations.

The news follows the decision by the Council of Mortgage Lenders (CML) to lower its repossession forecast for the year by 10,000, after admitting its previous prediction of 75,000 was pessimistic (“CML more optimistic on repossessions”, mortgagesolutions-online.com, 29/06/09).

The FSA attributed the quarterly fall to the pre-action protocol introduced in November 2008, under which courts can only grant a repossession order

Mark Graves, managing director of Linear Financial Services, revealed he was “not surprised” by the improving figures because of the measures which lenders were now taking to help keep borrowers in their homes.

He explained: “I think the difference between this time and the last recession is that people were perfectly happy to hand over the keys to their home and run away because they did not understand the consequences.”

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“This time, people are more determined to stay in their property and they are talking to lenders more in order to find ways to do that. We have learnt from the mistakes of the last downturn and people realise it is a false economy to have boarded up houses. No one wins.”

Graves warned that the improvement in repossession figures could be curtailed by rising unemployment.

He added: “If unemployment continues the way it has this year, then repossessions will shoot up very quickly.”

Nick Hopkinson, director of Property Portfolio Rescue, agreed with Graves, warning that surging unemployment would affect repossessions.

“In reality, there has been no genuine reduction in the number of struggling  homeowners, with the FSA’s figures merely reflecting lenders’ more cautious attitude to repossessing homes.”

The figures follow research from the Building Societies Association which revealed that 97% of borrowers suffering arrears in the last two years had not faced repossession. Of those who fell behind with payments, 33% have repaid their arrears in full, 41% were repaying them now, and 12% had come to an arrangement with their lender but were not yet paying off their arrears. Just 3% had their homes repossessed.