Debt advice was desperately needed during the third quarter of 2009 as the number of repossessions rose compared to last year, according to figures released by the Council of Mortgage Lenders (CML).
During the three months from July to Septemeber, the number of homes repossessed increased by 3% on last year’s figures during the same period.
The CML report showed that repossessions in the UK had risen to 11,700 for the third quarter, however this was lower han the 12,700 repossessions during the first three months of the year.
The number of homeowners with arrears on their mortgages also fell over the course of the year. By the end of quarter three 194,600 mortgages (1.77% of the total) were in arrears of 2.5% or more of the outstanding balance, compared to 204,200 cases (1.86% of all mortgages) at the end of June.
As a result of the number of households falling into difficulties slowing down, the CML has reduced its forecast of repossessions for the year from 65,000 to 48,000.
This is an already reduced figure (from around 75,000) due to the interest rate remaining at a historic low and government assistance initiatives, although they warn that next year will see an increase in the number of people struggling to get out of debt with repossessions rising slightly.
Michael Coogan, Director General at the CML, said: “Although the economy is not out of the woods yet, we no longer expect a dramatic rise in properties being taken into possession unless interest rates rise from the low levels that most commentators now expect to persist for some time.
“Borrowers should take heart from the latest findings as they reinforce the fact that lenders really do want to keep people in their homes ‚Äö√Ñ√¨ and are doing so.”
Ivan Cooper, Chairman at debt advice specialists Chiltern, said: “It’s encouraging that the expected number of repossessions has been revised down, but more should be done to help the 48,000 or so people who are clearly struggling with debt problems.
“Companies, like Chiltern, can often help people avoid losing their homes if the problems are caused by poor prioritisation and debt management of their unsecured balances.
“By seeking impartial debt advice as soon as any potential issues are spotted, repossession and bankruptcy can often be prevented.”