Home repossession on the decline, according to reports

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Home repossession on the decline, according to reports

8th November 2010

It has been reported that the number of home repossessions seen in British homes has declined dramatically in recent years. Many experts are hailing it as a piece of good news, indicating that this form of debt management is not being relied on by the public despite the country emerging out of a severe recession.

The decreases have been both short-term and long-term. In 1991, home repossessions were over 75,000 on an annual basis – that was roughly equivalent to 205 people losing their properties on a daily basis. However, there has been a 40% decline in the levels of people who haven’t been able to keep up with their mortgage repayments – with 2009 figures standing at 46,000 in total.

Some of the main reasons why experts believe home repossession has dipped could be because of the resources and advice which is available to those who are finding themselves in financial difficulty – meaning that home repossession is not normally a prospect for those with bad credit to contend with because they address their problems in advance.

From a more short-term perspective, the decrease in home repossessions is even more profound – with spring 2010 having 50% fewer repossessions when brought into contrast with the same three-month period of 2009.

However, with property prices acting very turbulently and there being concerns about significant reductions in public sector workers, there are fears that the number could rocket once more and that debt management advice will become more in demand than before.

Experts from charities that consult those who are in financial difficulty have been emphasising the importance of addressing financial agreements secured against the home first, before resolving any other outstanding matters. Despite the collection routines of some lenders, the priority needs to be placed regarding the urgency of the payments, and the implication which the debtor can face if they do not keep up to date.

Despite the warnings being made to the few who are believed to be susceptible to home repossession in the immediate future, a lot of people have taken this advice seriously – ensuring that they use debt management to satisfy their mortgage repayments before using disposable income to address money which is owed to other lenders.

There has also been clarity about how repossession is not just an inconvenience for the consumer involved – a stark reminder that there can be problems caused for mortgage lenders during these processes also. Helen Newton, an expert in debt management, had this to say: “Repossession benefits no one – borrowers lose their home, lenders take a bit hit in losing the mortgage repayments and the Treasury finds itself up to another £16,000 out of pocket.”

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