According to a recent report, the number of homes repossessed by lenders in the third quarter this year has dropped to its lowest level in the last three years.
Disclosing the details yesterday, the Financial Services Authority (FSA) said 9,145 people lost their homes to lenders in the third quarter of this year, fewer than second quarter numbers and lowest since 2007s last quarter.
Also, fewer people fell behind on their monthly repayments, a trend recorded for the seventh straight quarter. The total number of people falling behind their repayment schedule with at least 1.5 percent of their total mortgage outstanding was recorded at 345,000 for the quarter, a rise of 36,600 over previous quarter.
A little fewer than 8 percent of these borrowers are paying partial installments to their lenders under a renegotiated deal or not anything at all – since their accounts have been suspended.
A total of 16,184 home-owners accrued an additional £44 million to their existing mortgages in the third quarter, a measure devised to help borrowers. Overall 55 percent of borrowers who are in arrears are paying the lenders, up from 41 percent recorded at the end of 2008.
The data released yesterday is in conformity with the data released by the Council of Mortgage Lenders (CML). CML data showed that home repossessions were down at a two-and-a-half year low to 8,900 for the third quarter.
An additional 176,100 people were behind their repayment schedule with the total outstanding on their mortgage being 2.5 percent or more. The total number of homes repossessed in the first nine months of 2010 was reported at 28,400, indicating that the total number for the whole year will be lower than its revised estimate of 39,000. However, CML had originally estimated the figure at 53,000 for 2010, which was later lowered to 39,000.
Since the FSA’s survey also includes second charge mortgages and lenders who are not CML members the numbers reported are higher.
Repossession levels recorded during the economic crisis were generally lower than projected because of government support, lower interest rates and restraint shown by lenders.
FSA numbers also suggest that the mortgage market is slowly picking up pace with net lending recorded at £8.3 billion for the third quarter. Net lending represents the total advances made less prepayment & repayments received.
Net lending is up by 40 percent over the last quarter and 27 percent more than last year, same quarter. However, total amount of home loans sanctioned is lower by 6 percent over last quarter and has been recorded at £38 billion.