Debt Help Making Repossession
  • September 24, 2020
  • Peter Christoper
  • 0

New figures suggest that processes to help people get out of debt in a more sustainable fashion are having a positive effect.

In years gone by, if you had racked up serious amounts of debt, bankruptcy and the potential sale of your prized asset – your home – may have been your only option to solve your money worries. The penalties of this process were seen by many to be very severe, with the people who were made insolvent not only having their property taken away from them, but they also found it very hard to obtain credit in the years following the bankruptcy.

However, the Council of Mortgage Lenders (CML) has revealed that the rate of repossession in the first three months of 2013 has remained at the low level of 0.07 per cent for the fourth consecutive quarter.

To put this in perspective, the rate is the equivalent of fewer than 1 in 1,400 mortgaged properties being repossessed by banks and other lenders in January to March.

Overall, a total of 8,000 dwellings were repossessed in the first three months of this year, which is down from 9,600 in the corresponding period in 2012. There was further good news for homeowners as around 20 per cent of the properties taken into possession were those used as security for buy-to-let deals rather than owner-occupier homes.

Furthermore, the stats show that people are managing their mortgage debts effectively as arrears also remain stable. The number of people that are behind on their mortgage repayments has been similar across all categories for the past 12 months, a significant achievement given the financial difficulties that are currently found in the UK.

In the first quarter of this year, the CML stated that around 159,800 mortgages had arrears that were equivalent to at least 2.5 per cent of the total mortgage balance, which is around 1.4 per cent of the total number of policies in the UK.

Of these, 82,600 mortgages were found to have arrears that are between 2.5 and five per cent of the total mortgage balance, 32,000 policies were in the five to 7.5 per cent balance range, while 14,900 households are in arrears of between 7.5 and ten per cent of the balance. According to the CML, 30,300 per cent are behind by more than ten per cent of their balance.

Going forward, the CML is sticking by its forecasts, stating that around 35,000 properties will be repossessed throughout 2013 and an estimated 160,000 mortgages will be in arrears of 2.5 per cent or more by the end of December.

Jonathan Matthews has been helping people get out of debt sustainably for the past ten years as part of his role as an advisor at Debt Legal and he believes that repossession is now a last resort.

Mr Matthews explained: “Newer options such as debt management plans and other less severe initiatives such as IVAs, mean that more and more people are now keeping their homes as they become debt free.”

About Jonathan Matthews

Jonathan Matthews has over 15 years experience working as a senior debt advisor for some of the most prestigious debt management companies in the UK. Jonathan has been helping people get out of debt, is well respected within the finance industry and enjoys blogging and sharing news regarding debt and finance.