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The number of properties taken into possession by mortgage lenders rose to 5,630 in the second half of 2005, according to figures released by the Council of Mortgage Lenders.
This was 22% higher than the 4,620 in the first half of the year, but still extremely low by historical standards - the peak half-yearly figure was 38,930 in the second half of 1991.
The total number of repossessions in 2005 was 10,260. This was 70% higher than in 2004. Although still the third lowest annual figure since 1983.
The number of mortgages in arrears of 3-6 months rose to 59,700,up 3% compared with the end of the first half of
the year, and up 11% on the end of 2004.
The number of 6-12 month arrears cases rose to 32,470 - 3% higher than in the first half of the year,and 21% higher than at the end of 2004.
The number of mortgages more than 12 months in arrears rose to 13,820 - 10% higher than in the first half of the year, and 23% higher than at the end of 2004.
Although any rise in payment difficulties is unwelcome, the rise in possessions is in line with the CML forecast of 10,000 in 2005. The CML is forecasting possessions of 12,000 in both 2006 and 2007. The rise in arrears is also in line with
CML forecasts. At 106,000, the total number of mortgages in arrears of more than three months was just under the CML's forecast of 110,000.
The CML forecasts a rise in arrears cases to 120,000 in 2006 and 2007,and is reviewing the mortgage payment protection insurance (MPPI) "baseline", which sets out the minimum level of cover that MPPI should provide. Insurance remains an important strand of protection against
arrears and possessions, with around 9o% of MPPI claims met in full.
Commenting on the figures, CML Director General Michael Coogan explained: "As
expected, arrears and possessions are increasing from what was a phenomenally
low trough. Although the scale of increase is notable, the absolute numbers are
still extremely small, and set to remain so.
"Now would be a good time for borrowers to review their financial commitments.
Cutting unnecessary spending, ensuring you have a suitable mortgage deal, and
taking out suitable insurance such as mortgage payment protection insurance
could make the difference between coping and falling into trouble."
Source:
Credit Control
Journal
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