The CML statistics show there were 11,400 cases of possession in the second quarter of 2009, a 10% drop from the first quarter of the year. However, the number of households in arrears by three months rose 270,400, equivalent to 2.43%of all home loans.
Jackie Bennett, head of policy at the CML, said the data showed that lenders were committed to helping borrowers manage their way through payment problems and get their mortgage back on track over time.
“Clearly, low interest rates are also helping borrowers who are committed to working to resolve their arrears, paying what they can – and when they can – towards their mortgage, and maintaining good communication with their lender.”
The figures have been put down to the introduction of the Mortgage Pre-action Protocol in November last year, which gives guidance on what the courts expect lenders and borrowers to have done prior to a claim being made. However, industry figures have warned that the households saved from repossession are still in trouble and still in arrears.
Ed Stansfield, property economist at analyst firm Global Insight, said the drop reflected Government pressure on lenders to avoid foreclosing on a mortgage.
He continued: “We would also be wary of reading too much into the latest decline in possessions. For a start, a similar dip reported in the final quarter of last year was not sustained. In addition, despite the low interest rate environment, arrears continued to rise in Q2, albeit at a far more gradual pace than in the previous two or three quarters.”
Simon Maughan, analyst at MF Global Securities, added: “Unfortunately things are going to get worse before they get better. There has been some fiscal stimulus which has muddied the water somewhat but I find it hard to believe we are out of the woods yet.”
