‘Low house prices lead to fewer repossessions’

Low house prices are thought to have contributed to the lowest number of repossession orders in Kent for almost six years.

Latest figures released by the Ministry of Justice show that 310 mortgage possession orders – the final stage before people lose their homes – were issued in the county’s courts between April and June this year.

This is the lowest quarterly number since the final three months of 2005 when there were just 295 orders.

According to Mark Ellison, Kent service manager for the housing charity Shelter, the low number may be due to mortgage lenders wanting a better return on the properties they sell following repossession.

He said: “Most people would expect repossession figures to rise during times of financial difficulty, but mortgage lenders are much more likely to hold off and repossess properties when house prices are on the increase rather than when they are falling.

“It’s not surprising and is just one of the ways in which lenders operate. It’s always a good thing when people are allowed to stay in their homes.”

Nationally the number of homes repossessed by mortgage lenders fell slightly in the first half of the year, from 9,100 in the first quarter to 9,000 in the second.

But industry experts predict the figures will rise for the rest of the year to bring an estimated total of 40,000 repossessions.

Chris Gardner, director of independent mortgage broker Obligo, said: “The current figures are being kept artificially low by two important factors – the interest rate is at a historic low and lenders have shown remarkable forbearance.

“Together they have created a fool’s paradise, where people’s mortgage payments are comparatively low and lenders are being especially tolerant of late payers.

“But lenders’ forbearance cannot last forever. If they change their approach then the rug will quickly be pulled from under many late payers, leading to thousands more repossessions.”

When landlord possession orders are also taken into account for people who rent their properties, there are exactly 800 households currently at risk of repossession in Kent and 205 in Medway.

Mr Ellison revealed that Shelter now offered debt advice to help people in danger of losing their homes, with services based in Ashford, Chatham and Dover.

He said: “These figures show the pressures of rising living costs and high unemployment are continuing to take their toll, placing hundreds of people in Kent at real risk of losing the roof over their heads.

“We know from the people we see every day that slipping into debt is often the start of a downward spiral that can end in losing a home, which is why it is absolutely vital people struggling with their finances seek advice as early as possible.”

Visit www.shelter.org.uk for more information.