Lenders are making efforts to avoid repossessions, with actual figures for 2008 lower than earlier forecasts.
Some 40,000 properties were repossessed in 2008, according to figures from the Council of Mortgage Lenders (CML). This was 5,000 lower than the organisation's original prediction for the year.
Repossessions for the final quarter of the year reached 10,400, a significant dip from the 11,100 recorded over the third quarter. Despite the drop in repossessions, the CML noted a slight rise in the number of mortgages with arrears. Some 1.57 percent of borrowers – equivalent to 182,600 mortgages - had arrears of more than 2.5 percent of the total balance at the end of 2008, compared to 1.29 percent in the third quarter and just 1.08 percent in the final three months of 2007.
CML director general Michael Coogan suggests that these figures show lenders are using repossessions as a last resort.
"Despite the upward pressure on mortgage arrears and repossessions arising from the problems in the economy and rising unemployment, both lenders and government are continuing to find more ways to help more people stay in their homes," he commented. "We strongly urge borrowers to contact their lender and work with them before taking this step, as there may be other solutions. Borrowers are still liable for their debt, even if they leave the property, so working through their problems is much more likely to be in their best interests."
