Sharp fall in repossession of North East homes
May 16 2009 by Dan Warburton, The Journal
A SHARP fall in the number of people losing their homes across the North East was announced yesterday as lenders cooled their stance on repossessing property.
But contrasting figures from the Council of Mortgage Lenders (CML) suggested the number of repossessions nationally had rocketed by 50% as 12,800 people lost their homes.
Ministry of Justice (MoJ) figures indicate repossession orders and claims have plummeted in the region following the introduction of the Government’s pre-action protocol.
The policy urges mortgage lenders to exhaust every avenue before granting a repossession order in a bid to make lenders adopt a less aggressive approach.
And yesterday’s figures suggest the number of mortgage possession claims lodged in North East courts had dropped by 32% to 1,661 in the first quarter compared to the same period last year.
Mortgage possession orders granted also dropped by 24% to 1,184 but the MOJ warned that “the extent to which the [new rules] have resulted in the issue of claims being delayed rather than abandoned is unclear.”
However these figures paint a different picture to those announced by the CML. Their statistics indicated a total of 12,800 properties were repossessed nationally, up from 8,500 a year earlier, and 10,400 during the previous quarter.
But despite the steep jump, the council said its forecast of 75,000 repossessions during 2009 now looked pessimistic and it expects to revise the figure downwards.
Michael Coogan, the CML’s director general, said lenders were keen to assist anyone who got into difficulties with repaying their mortgage.
He said: “It is quite clear that the number of arrears cases is rising far more markedly than the number of repossessions. Lenders are demonstrably increasing the forbearance they are offering, while many struggling borrowers have gained some breathing space through lower interest rates feeding through to lower monthly payments.”
Figures released by the CML also showed a leap in the number of homes repossessed that were owned by buy-to-let investors. There were 1,700 buy-to-let repossessions in the first quarter of the year, up from 1,300 during the previous three months.
Housing Minister Margaret Beckett said: “With almost three million private tenants in the country, the private rented sector plays a vital role in providing choice and flexibility in the housing market. That’s why we need to ensure tenants have the protection they deserve, the many decent landlords receive the support they need, and those landlords whose performance is inadequate either improve or leave the sector.”
Landlords will now have to be registered on a central list in a bid to further protect tenants rights.
Bev Budsworth, managing director of The Debt Advisor, said the pre-action protocol – which gives six months’ grace on arrears rather than three months as before – would only stave off a steeper rise in repossessions. She said: “We could well see a continued increase in repossessions later in the year after the new six-month threshold is reached.”
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