UK Home Repossession Up 3 Percent In 3Q

LONDON (AP) — Home repossession in the United Kingdom rose by 3 percent in the third quarter, but the Council of Mortgage Lenders said Thursday that it has reduced its forecast for the full year as mortgage arrears are declining.

The council reported that 11,700 properties were repossessed in the period, up from 11,400 in the previous quarter.

The number of mortgage borrowers in arrears of 2.5 percent or more of the outstanding balance fell from 204,200 cases in the second quarter to 194,600 in the third quarter, the council said.

The council reduced its forecast for full-year repossessions to 48,000, down from the 65,000 figure predicted in June.

"We are glad to have been wrong on our previous forecast for mortgage repossessions this year," said Michael Coogan, the council's director general.

"Low interest rates, and lenders' forbearance policies, have helped to cushion many households facing financial problems. And although the economy is not out of the woods yet, we no longer expect a dramatic rise in properties being taken into possession unless interest rates rise from the low levels that most commentators now expect to persist for some time."

The Bank of England's key lending rate is at an all-time low of 0.5 percent, and not expected to rise before the middle of next year. The low base rate helps people with adjustable-rate mortgages.

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On the Net: http://www.cml.org.uk