10% fewer repossessions than expected in 2007
Fewer than 1 in 400 mortgages led to repossession in 2007, according to the Council of Mortgage Lenders.
At 0.23%, the repossession rate was less than half the rate experienced throughout the first half of the 1990s. And at 13,500 the number of repossessions in the second half of 2007 was almost identical to the number in the first half of the year (13,600).
The CML had previously forecast that there would be 30,000 repossessions in 2007, but the actual figure is nearly 10% lower than forecast, at 27,100. Although repossessions have risen since their remarkable low point of fewer than 10,000 a year in 2003 and 2004, they continue to represent a tiny fraction of all mortgages.
Fewer than half a per cent of all mortgages had accumulated arrears of more than six months at the end of 2007, and the profile of arrears has returned to virtually the same levels as in the first half of 2006. The rate of 6+ month arrears is only around one-seventh of the level experienced in the early 1990s. The table on arrears months analysis gives details.
Looking ahead the Council said it remains difficult to forecast the likely level of arrears and repossessions in 2008 as conflicting factors are at work. The good news is that the impact of payment shock is likely to be more muted than previously expected, thanks to the downward path that interest rates now appear likely to follow. But there is no room for complacency. Funding pressures remain, and are having a specific impact on the capacity of the adverse credit sector to meet demand. This may affect arrears and repossessions.
