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Figures published yesterday by the Council of Mortgage Lenders (CML) on arrears and repossessions got a mixed response by the press.
It’s true that the figure of 46,000 repossessions in 2009 made it the highest figure for 14 years and that over 120 properties were repossessed every day last year – and the papers certainly jumped on that.
However, that’s wasn’t the full picture. The fact is that the situation could have been a lot worse.
Repossessions in the last quarter of 2004 were actually down 13% on the previous quarter, the second quarter in succession. I’m not suggesting that this isn’t a problem or that the figures aren’t too high because it is and they are! The figure was actually 2,000 less than the CML’s revised and scaled-down forecast for 2009 and nearly 30,000 less than their original estimate.
Does this point to the fact that recent government initiatives put in place to help people who can’t pay their mortgages is working? Or, is the fact that interest rates are at an historic low, the key factor meaning that people still have relatively ‘affordable’ mortgage payments? A sceptic could even speculate that falling house prices have pushed the loan to value ratio on the average property so low that it’s just not worth lenders repossessing them until house prices rise.
Who knows what the real reason is, I suppose that the most important thing is to remember that whilst the figures are heading in the right direction, we’re not out of the woods yet!