A total of 9,100 UK homes were repossessed in the first quarter of 2011, an increase of 15 percent from the previous quarter, according to the Council of Mortgage Lenders (CML).
This figure is 10 percent lower compared to the same period last year and remains steady with the quarterly average of last year, the lender noted.
However, the number of homeowners lagging behind on their mortgage payments has slightly dropped since December.
CML advised that households will be financially stretched for a period.
The lender estimated that a total of 40,000 consumers will lose their homes in 2011, a rise from 36,300 last year.
At the end of 2010, repossessions were at a comparatively low level but the recent quarterly figures reveal the first quarter-on-quarter increase since the third quarter of 2009.
Although more homes were repossessed, arrears levels dropped during the same period.
At the end-March, the number of home loans with arrears equivalent to 2.5 percent or more of the outstanding balance totalled 166,900, which was 1.47 percent of all loans.
This was lower than the 170,000, or 1.5 percent, of loans in arrears at the end of December 2010 and 11 percent less than the 187,300 mortgages in arrears, or 1.65 percent of loans, from a year earlier.
CML Director General Michael Coogan believed that lenders were giving home owners the opportunity to get back on track with home loan payments, rather than repossessing houses prematurely.
“Looking ahead, the financial position of many households is likely to be stretched for some while and some will inevitably find themselves in difficulty,” Mr. Coogan said. “Lenders have a range of options to nurse borrowers through temporary problems.”
Mr. Coogan added that the mortgage market regulator had alerted lenders that being generous with borrowers lagging behind on payments could result in problems, as could repossessing houses quickly without giving home owners the chance to solve their problems.
Source – Property Guru Singapore
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