Fri, 12 Feb 10
Latest Council of Mortgage Lenders (CML) figures show that repossessions are at a 14-year high.
Last year 46,000 homes were repossessed, up 6,000 on 2008’s figure and the highest level recorded by the CML since 1995.
The CML’s latest figures regarding arrears suggest that the situation is unlikely to improve in 2010.
The number of borrowers with mortgages in arrears was 188,300 by the end of 2009, up 3% on 2008’s figure.
Despite these largely negative figures the CML has taken an upbeat stance in its comments, choosing to instead focus on the repossession and mortgage arrear rates being better than it had predicted.
The CML had feared that those in arrears would total 195,000 in 2009. In December 2008 the CML said that 75,000 homes could be repossessed by the end of 2009.
CML director general Michael Coogan said: "The fact that mortgage arrears and possessions did not rise as much as we feared in 2009 is testament to the effect of low interest rates and a great deal of concerted effort by lenders, government and the advice sector to help borrowers to address financial difficulties when they occur.”
He indicated that the CML might revise the current predictions for 2010. The CML predicts that 53,000 homes will be repossessed and 205,000 borrowers will fall into arrears by the end of the year, but Coogan says these figures may be “a little pessimistic.”
For those struggling to meet repayments housing minister John Healey may well be public enemy number one, following his comments this week regarding repossessions.
The minister caused outrage after saying during an interview on BBC Radio 5 Live that for some people repossession “can be the best option”.
He said: "For some people it can be the best option for them to allow their home to be repossessed... some families may not be able to keep up with mortgage repayments even if they're re-negotiated and rescheduled.”
The Conservatives have demanded the minister apologise to those who have lost their home. Listeners also called in to voice their disgust. One said: “I lost my house in September. It was not the best thing to happen to me by a long shot."
There was further bad news for the property market this week when the Royal Institution of Chartered Surveyors (RICS) latest monthly survey revealed a slump in buyer interest – see Home News 11 Feb 2010.
For the first time in 14 months more surveyors reported a fall rather than a rise in buyer enquiries, according to the organisation’s January survey.
The figures also show a reduction in the number of sellers between December and January.
There was more positive news when surveyors were asked about prices. In January 32% more surveyors reported a rise in prices rather than a fall. This is up on December’s figure of 30%.
RICS has blamed the extreme cold weather in January for the slump in buyer and seller interest but is optimistic that enquiries will pick up in the coming months.
Ian Perry, RICS spokesman said: “The cold snap in January clearly had a huge impact upon both supply and demand in the housing market with activity coming to a halt amid the seasonal chaos. Activity and interest is likely to pick up in the coming months as the market experiences a Spring bounce.”
However, he warned: “House prices are likely to rise in the short term but if more supply continues to come onto the market, it is possible that the market will run out of steam in the latter part of the year.”
A regional breakdown of the RICS figures shows that surveyors in London, the south east of England and the south-west of England are the most upbeat about prices, while those in Wales, Yorkshire and Humberside and the north of England are the most likely to report price falls.
According to Home.co.uk asking prices for homes on the market in England and Wales fell by 0.3% during the month leading up to its February Asking Price Index report.
In mortgage sector news this week it emerged that the stamp duty holiday for homes worth between £125,000 and £175,000 successfully enticed first-time buyers into the property market.
This stamp duty holiday finished at the end of last year and latest figures released by the CML show that in December there were 24,900 loans to first-time buyers, the highest figure since November 2007 and a 26% increase in November 2009’s figure.
The value of the loans to first-time buyers in December totalled £2.9bn, which is also 26% up on the previous month’s figure.
By Joe Lepper
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