–Arrears Also Ease, But CML Still Cautious On Cutting 2010 Fcast
–Says Many Homeowners Only Just Coping, Remain Vulnerable
–Urges Govt Support For House Market Should Stay In Place

LONDON (MNI) – The number of UK mortgages in arrears and the number
of repossessions both fell in the first quarter of 2010, according to
the Council of Mortgage Lenders.

But the CML warned that while this fall was “welcome” – there was
no cause for complacency “as a large number of households, who are just
coping, still remain vulnerable to shocks that may arise from the
economic uncertainty ahead”.

“Repossessions as a proportion of all mortgages remained steady at
0.09% in the first quarter, the same proportion as in the previous
quarter and down from 0.12% in the first quarter of 2009. The number of
repossessions was 9,800, down from 10,600 in the previous quarter and
13,200 in the first quarter of 2009″.

The proportion of mortgages in arrears also fell. The total
proportion of loans with arrears equivalent to 2.5% or more of the
mortgage balance was 2.38%, down from 2.52% in the previous quarter and
2.81% in the first quarter of 2009. The number of loans in arrears was
down from 206,800 at the end of the first quarter of 2009 and 196,400 at
the end of last year to 186,300 at the end of the first quarter of this
year.

The CML said it was cautious about revising its forecasts for the
number of arrears and possessions cases in 2010, although it expects to
do so later in the summer.

“However, if current levels of government support continue, if
interest rates do not rise, and we have no new economic shocks, the
53,000 repossessions forecast for the year is pessimistic”.

CML director general Michael Coogan commented:

“With all eyes on the new government and what steps it will take to
address the fiscal deficit, we cannot emphasise too strongly the
importance of continuing to fund the support mechanisms that are proving
effective in containing mortgage arrears and repossessions”.

Coogan continued:

“We hope and expect to be able to revise down our 53,000 forecast
for repossessions in 2010, but we are acutely conscious of the
beneficial influence that low interest rates and the package of support
have played so far. The dampening effects on households and the wider
housing market that fiscal tightening is likely to exert are still to be
felt, but it should be a key priority to support borrowers most in need
and maintain funding for the government’s housing policies.”

The government is continuing to offer support to the house market
by easing the burden of stamp duty payment on first-time house buyers.

–London newsroom: 4420 7862 7492; email: ukeditorial@marketnews.com

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