46,000 homes were repossessed during 2009 according to the latest figures from the Council Of Mortgage Lenders - the highest number since the height of the last property crash in 1995.

And there was more bad news with regards to mortgage arrears. 188,300 mortgages ended the year with arrears equivalent to at least 2.5% of the outstanding mortgage balance - 3% higher than at the end of 2008. That means for every £100,000 borrowed, 188,300 borrowers are in errors by at least £2,500.

Within the total number of arrears cases, there is a different picture in terms of what seems to be happening among households with lower levels of arrears (where the numbers are improving), and higher levels of arrears (where the numbers are little changed).

This suggests that at present some borrowers facing only modest difficulties are being helped by low interest rates to get back out of trouble, whereas those with more severe problems may be stabilising their arrears but not recovering from them.

"The fact that mortgage arrears and possessions did not rise as much as we feared in 2009 is testament to the effect of low interest rates, and a great deal of concerted effort by lenders, government and the advice sector to help borrowers to address financial difficulties when they occur," said CML director general Michael Coogan.

"We are not out of the woods yet - 2010 will still be a challenging year for many borrowers, and some households will inevitably find their finances being squeezed if and when interest rates do eventually rise.

"But borrowers should feel reassured that lenders want to help them keep their homes wherever possible. The vast majority of people who get into arrears manage to keep their homes, and will do so even if interest rates rise. Seeking advice as soon as financial problems occur will help to minimise the risk of the situation getting out of control."



February 14th, 2010