During the first half of 2006, repossessions were recorded at 8,140 and rose to 8,860 in the second half. However, the CML said these levels were broadly similar to 2001 and roughly 1 in 690 mortgages.
While the rate of increase slowed at the end of 2006, the CML has predicted repossessions will continue to rise to 19,000 in 2007 and 20,000 in 2008 to reflect consumers worsening prospects through higher interest rate expectations.
The figures also showed arrears and short-term arrears both fell by 8.5 per cent and 6 per cent respectively in 2006. Yet, the CML has forecast short term arrears are likely to increase, especially during the second half of 2007.
Michael Coogan, CML director-general, commented: “The arrears picture is complex. The problems caused by previous interest rate rises have now worked through, so recently arrears levels have fallen. Yet, interest rates are rising again and payment shock may be an issue for some this year as their existing fixed or discounted deals expire.”
Darren Pescod, managing director for The Mortgage Broker, was unsurprised by the figures and added: “Mortgage payment protection insurance could help matters, as it gives people a 12 month window to sort things out. However, it’s not the be all and end all.”
