Home repossessions down to 8500 from 9600 in the previous quarter
The latest report from the Council of Mortgage Lenders (CML) pegs the figure of repossessions at 8500 down from 9600 in the previous three months. This news comes as a respite for an economy struggling under the grip of double-digit recession and increasing unemployment.
The government run Support for Mortgage Interest (SMI) scheme is cited as one of the major reasons for this positive development. Lower interest rates and support for unemployed mortgage holders have played a major role in bringing down the repossession numbers.
In spite of this positive development, lenders are of the opinion that a further dip in the economy could trigger a slew of repossessions. While banks have sheltered people with lifelines a further slowdown in the economy would force banks to take action. As many as 28000 long term defaulters could end up having their homes repossessed. In spite of the base lending rate remaining flat, mortgage rates are on the rise.
By May 2013 over a million households would find their mortgage rates increased further. For families with a minority stake in their homes remortgaging at cheaper rates also remains a distant dream. With living costs on the rise, wages hikes being minimal and the threat of losing jobs looming over their heads, more and more households are finding it difficult to keep up with their mortgage payments. Increased government support and a revival in the economy seem to be their only hope.