The Council of Mortgage Lenders (CML) has stated that the number of mortgages going into arrears and the number of mortgaged homes being repossessed has remained steady. In the first three months of 2011, 9100 homes were repossessed which is 100 more than in the second quarter. However, CML still expect at least 40,000 people to have their homes repossessed this year, an increase on the 36,000 in 2010.
There has been an increase in the number of people in mortgage arrears between 1.5% and 2.5% of the total balance outstanding. It rose to 78,500 between April-June 2011 in comparison to 77,800 in the first quarter. However, the number of people whose arrears totalled to more than 2.5% of their outstanding balance decreased to 164,000 from 166,700. In addition, the amount of homes that were repossessed due to non payment of the mortgage was 7% higher in the first six months of 2010 than the first half of 2011.
For the past two years, The Bank of England has kept its interest rates at 0.5% which seems to be a contributing factor towards the stabilisation of mortgage defaults. The CML do still expect the number of homes that are repossessed to increase again however, predicting that it will rise to around 45,000 by next year.
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