Home repossessions fall to 20-year low

House repossessions fell to a 20-year low in 2002, with one borrower in a thousand having a property seized by a mortgage lender, it was revealed yesterday.

The number of people seriously behind with home loan payments also fell to the lowest level since 1982, the Council of Mortgage Lenders said.

At a time of concern about the risks of a possible house price crash and record levels of mortgage borrowing, the CML stressed that the figures "reflect recent benign conditions rather than future uncertainty in the housing market".

A total of 11,970 properties were repossessed by mortgage lenders during 2002, representing 0.11% of all mortgages, and well down on the 18,280 homes repossessed in 2001 and the 1991 total of 75,540.

The 50,510 mortgage holders more than six months behind with their payments represent fewer than one in 200 of all borrowers. That figure rose to 352,000 in 1992 after the collapse of the last property boom.

"One borrower in a thousand suffered repossession last year, compared to around one in 130 at the worst point of the cycle in 1991," said Peter Williams, the CML's deputy director general. This was an excellent achievement by the mortgage industry but the CML wanted to see even more people protected from the risk of losing their home.

Restrictions on state help for people in trouble with mortgage repayments were introduced eight years ago.

People who have taken out a mortgage since October 1995 must wait nine months before they are entitled to receive income support for mortgage interest payments, and even then it is means tested.

The CML called on the government to improve this scheme and urged borrowers to claim any tax credits they are entitled to, and consider insurance to protect themselves from the risk of getting behind with their payments.

It set a new target yesterday of keeping the average annual number of repossessions below 30,000, down from 35,000 over the past 10 years.

The industry body has warned that borrowers should not be complacent about their ability to repay mortgages if interest rates rise sharply or their circumstances change.

If house prices were to collapse, people could end up owing much more than their property is worth.