Home repossessions fall 9% and stabilise

Published 16th Sep 2009

The number of British homes being repossessed fell 9 per cent in the three months to June compared to the previous quarter, according to the Financial Services Authority (FSA).

The number of repossession fell by 1,274 to 13,610 the City watchdog said in its quarterly update on mortgage lending market.

The figure is still 23 per cent higher than a year ago, but the FSA said the data showed that "the sharply rising trend evident up to the third quarter of 2008 has stabilised in the last three quarters."

It said that the change may in part be due to the Ministry of Justice introducing more hurdles to banks taking control of houses from owners who have fallen behind on mortgage repayments but added it "is also likely to reflect lenders’ more cautious attitudes to possession helped also now by reduced interest rates."

The number of new people getting into arrears on their mortgage payments fell for a second quarter, down 14 per cent to 51,000 from the previous three months.

But the total number of people in arrears continued to increasing, to rise another 3,000 in the quarter to 403,000, a 30 per cent increase from a year ago.

The total value of outstanding residential loans grew 0.2 per cent in the quarter to £1.2 trillion, reversing a 0.2 per cent fall in the first quarter and making a total 1 per cent increase on the year.

The FSA said lending had also become less risky with the proportions of new loans done at a loan to value ratio of more than 90 per cent continuing to fall: to under 3 per cent in the second quarter against 15 per cent in early 2007 at the peak of the housing boom. Loans to borrowers with a poor credit record fell to just under 0.4 per cent against 2.2 per cent a year earlier.

It also said that the amount lent to people to buy homes surpassed the amount used for remortgaging existing homes in the quarter for the first time since the third quarter of 2007.

The figures come after the monthly survey from the Royal Institution of Chartered Surveyors said that for the first time in more than two years, more agents had reported a rise, rather than a fall in values, in August.

The FSA also said that new lending on home purchases was about 51 per cent of total lending in the quarter, up from 36 per cent in the previous quarter, marking the first three-month period to show more than a 50 per cent share since the last quarter of 2007.

Source: ' Times '

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