A new report from the Financial Services Authority (FSA) has shown that the number of UK homeowners losing property to repossession dipped in the last quarter of 2009.
The data indicated that the number of homeowners not meeting their mortgage repayments fell 9 per cent to 41,400 when compared to the third quarter of 2009.
Falling interest rates have encouraged the drop in repossessions along with a new protocol which was introduced in 2008, banning lenders from taking homeowners to court until all other attempts to retrieve payment could be proven.
The decrease in repossession became apparent amid a record low mortgage take-up and stronger house prices in 2009. Hence lending became more affordable and allowed those homeowners who were struggling with re-payments to sell their homes with some profit.
The housing minister, John Healey announced a government scheme to reduce repossession rates, whilst ?2.5 million is being provided in order to offer counselling to homeowners, especially targeting 86 areas where repossession is at the highest levels.
The data demonstrates the slowdown of the housing market. At the end of last year, the total outstanding loans stood at a value of ?1,027 billion, a rise of only 1 per cent from the same time in 2008. New loans dropped by 6 per cent to ?36 billion in the third quarter of 2009.
The number of new loans of 90 per cent of the property value made up less than 2 per cent of loans during the first and second quarter of 2009, compared with 6 per cent in the last quarter of 2008. These 90 per cent loans made up 14.8 per cent of all loans during the housing boom of 2007.
