This was 15% up from the 7,900 in the fourth quarter of 2010 (the fourth quarter of the year typically sees a lower number), but 10% lower than the same period a year ago, and equal to the average quarterly number of repossessions throughout 2010.
The total number of mortgages in arrears also continued to fall, and numbers fell in all but the deepest arrears band. At the end of March, the number of mortgages with arrears equivalent to 2.5% or more of the outstanding balance showed an improvement to 166,900 (1.47% of all loans), just under 2% down from 170,000 (1.5% of all loans) at the end of December 2010, and an 11% improvement on the 187,300 (1.65% of loans) a year earlier. On this measure, the first quarter saw the lowest share of mortgages in arrears since the third quarter of 2008.
The only arrears band where a worsening was experienced was where arrears exceeded 10% of the mortgage balance. This band increased slightly in number, from 27,400 at the end of 2010 to 27,700, although the proportion of all loans was unchanged at 0.24%.
The CML’s current forecasts of 40,000 repossessions and 180,000 arrears cases of 2.5% or more at end-year already anticipate short-term pressure on household finances as a result of an expected squeeze on incomes. Overall, the prospect of low interest rates for a protracted period should limit the adverse impact on keeping up mortgage payments, despite the increased tax and inflation burden on households. However, the increased regulatory emphasis on prudential issues, including the FSA’s concerns that "excessive" forbearance may be storing up future problems, needs to be balanced against the objective of minimising repossessions for both social and market related reasons.
CML director general Michael Coogan commented:
"In essence, good arrears management practice is a balance between giving households every chance to rehabilitate and get back on track, and limiting the damage in the minority of cases where this is not going to be achievable.
"Looking ahead, the financial position of many households is likely to be stretched for some while, and some will inevitably find themselves in difficulty. Lenders have a range of options to nurse borrowers through temporary problems, but will clearly need to be mindful of the regulator’s concern that too much forbearance may be as bad as too little.
"Any household facing temporary difficulty can be reassured that there are many checks and balances in place to ensure that they are treated fairly, receive good advice, and have every chance to stay in their home where this will be sustainable for them in the long term. If in doubt, take advice from Shelter, Citizens Advice, or National Debtline – and do talk to your lender as they will want to help you."
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