The number of repossessions will be lower in 2009 than the peak of 76,000 in 1991 – but the outlook for 2010 is still uncertain.
Analysis of repossessions by CIH’s consultancy arm – ConsultCIH – published in October 2009 identified some clear financial similarities and patterns of household behaviour. ConsultCIH predicts that if interest rates begin to rise steadily in 2010, people who have taken out a mortgage in the past four years, and those who have re-mortgaged in the past five, are more likely to be at risk of repossession.
At the same time, research published by the Building Societies Association has shown that the sooner a borrower contacts their lender or obtains free independent money advice the greater the chances of them staying in their home. The research found that 97% of borrowers who fell into arrears during the last two years have remained in their homes, demonstrating the effectiveness of the approaches taken by the vast majority of lenders.
Richard Capie, CIH Director of Policy and Practice said: "A long-term safety net for vulnerable home owners is essential if we are to support people to stay in their own homes throughout the recession and beyond."
Paul Broadhead, BSA Head of Mortgage Policy said: "Falling into mortgage arrears is always a worrying experience for the individuals involved and every repossession represents a great personal tragedy. We have long suspected, and research now proves that if a borrower contacts their lender as soon as they realise that they may face difficulties, the overwhelming majority manage to repay their arrears and stay in their homes."
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