The Council of Mortgage Lenders has released its latest numbers.
The second quarter of this year has seen a marked decline in properties that have been taken back by their mortgage lenders and, at 8500, was significantly down from the 9600 of January to March this year.
Figures peaked in 2009 with 13,000 evictions between January and March.
With interest rates at the same low level as three years ago, is the current drop attributable to home owners being better off and thus able to meet their monthly repayments better? Or is this an indication that lenders are more hesitant, indeed sympathetic, with regard to legal action?
We suspect the latter given that the Government has imposed far tougher rules on banks and building societies in ensuring that they exhaust all reasonable means of assisting mortgage customers that are in difficulty.
In the prior economic downturn of the 1990’s, repossessions were running at over 70,000 per annum. 2012 paints a far less bleak picture at a likely 40,000 by year end. In any case, the Armageddon that many housing market doomsters prophecised has simply not materialised.
‘HousePriceCrash.com might like to re-evaluate their position perhaps?
Householders in trouble with their loans have low interest rates to ‘thank’ for that respite albeit small comfort to those that have been squeezed out of their homes as a consequence of hard times that are beyond their control.
Whilst unlikely in the short term, ant raising of rates will lead to more repossessions. Those forced sales, together with those of sellers that become far more motivated to sell in the face of higher monthly mortgage payments, will contribute to transaction levels increasing. The unintended consequence though will be that the price at which those sales occur will inevitably be lower if there is a marked increase in homes that ‘have’ to sell.
And that, in a nutshell, is the difference between the market of the 1990’s and that of today.