Foreclosures, Delinquencies Still Low in the U.K.

The number of delinquent mortgages and the number of properties taken into possession by mortgage lenders remained flat in the first half of 2004 compared with second half of 2003, according to figures released recently by the Council of Mortgage Lenders here.

"Out of 11.8 million mortgages outstanding at the end of June, only 3,240 properties were repossessed in the first half of this year - around 1 in every 3,650 mortgages," the council said. "This compares with 3,660 in the second half of 2003, and 4,230 in the first half of last year. At their peak in 1991, there were over 75,000 possessions."

The number of U.K. mortgages with long-term delinquencies continued to decline, but at a slower pace than in recent periods. At the end of June, there were 39,470 cases of mortgages delinquent by more than six months. This compares with 42,480 at the end of December last year, and 48,170 at the end of June 2003. The number of three to six month delinquency cases was 51,020 at the end of June, compared with 52,650 at the end of December 2003, and 61,710 at the end of June last year.

"This suggests that arrears are now at or very near to their trough - unsurprising, given that interest rates have now begun to rise," the council said.

"The stock of properties in possession awaiting disposal by mortgage lenders at the beginning of January 2004 was 1,960," according to the CML.

"The number remained virtually unchanged at 1,930 by the end of June. This is the lowest stock of possessions on record since the CML began collecting data on the stock of possessions in 1990," the trade group said.

Commenting on the figures, CML director general Michael Coogan said in a CML press release:

"Arrears and possessions fell slightly in the first half of this year. With interest rates rising, it looks as if the long run of declining arrears has now flattened out. But we are forecasting only a very marginal increase looking ahead, with perhaps 60,000 cases of short-term arrears and fewer than 9,000 repossessions by the end of next year, reflecting higher mortgage costs within a stable economic environment. The forecasts remain very low by historical standards, and still below mid-year 2003.

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