The Council of Mortgage Lenders saw a fall in repossessions in Q1 2010, but says it is still cautious about lowering its forecast for the year.
The trade body estimates there will be 53,000 repossessions in 2010, the highest number for 15 years.
Michael Coogan, director-general of the CML, says: “We hope and expect to be able to revise down our 53,000 forecast for repossessions in 2010 but are conscious of the beneficial influence that low interest rates and the package of support have played so far.
“The dampening effects on spending and the housing market that fiscal tightening is likely to exert are still to be felt, but it should be a key priority to support borrowers who are most in need and maintain funding for the government’s housing policies.”
There were 9,800 repossessions in Q1, down from 10,600 in Q4 2009. The proportion of mortgages in arrears also fell.
The proportion of loans with arrears equivalent to 2.5% or more of the mortgage balance was 2.38% – down from 2.52% in Q4 and 2.81% in Q1 2009.
The number of loans in arrears was down from 206,800 in Q1 2009 and 196,400 at the end of Q4 to 186,300 in Q1 2010.
Meanwhile, figures released last week by the Office for National Statistics show the number of individuals unemployed rose by 53,000 to reach 2.51 million in the three months to March – the highest level since December 1994.
Eric Stoclet, managing director of Crown Mortgage Management, says this is likely to negatively affect the level of arrears and repossessions t some point.
He says: “The Bank of England’s decision to keep the base rate at its present historic low level has improved the ability of home owners to meet their mortgage payments by keeping the cost of borrowing low, but it is reasonable to ask how long this will last.”