The number of home repossession seen in the UK last year is said to have fallen according to figures from the Council of Mortgage Lenders, which were released recently. Over recent years repossession numbers have been rocketing, with many unable to keep up with their mortgage repayments and finding themselves at the receiving end of repossession action taken by banks and lenders.

In 2008 the former Labour government slashed the base interest rate to just 0.5 percent, which is the lowest it has ever been in the history of the Bank of England. It has now been at this rock bottom level for nearly two years, and there is no doubt that many homeowners have been spared repossession as a result of the increased affordability that the reduced base rate has brought with it.

This has been reflected in the figures released by the CML, which showed that home repossessions fell by around 24 percent last year, and there was also a 13 percent drop in the number of homeowners that had arrears of 2.5 percent or more. For many, the drop in the base rate was their saving grace, and enabled them to keep up with repayments on their mortgages and keep a hold of their homes.

However, despite the encouraging figures there are fears that repossession numbers could rise again as a result of interest rate increases, which are expected over the course of this year.

Michael Coogan from the CML said: “As we go through 2011, the number of people facing payment pressures may increase if interest rates rise, and as a result of the spending cuts that have resulted in reductions in the level of public support available. We will be monitoring developments closely, but at present we continue to expect the number of arrears and repossessions to be in line with our forecasts of 40,000 repossessions and 180,000 arrears cases as at the end of 2011.”

 

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