Outright doom and gloom was predicted for UK home owners at the start of 2009, but the reality is not as bad as some initially feared. It is of little comfort to those who have been unfortunate enough to lose their homes, but recent data shows that the recession has not hit home owners nearly as hard as expected.

The Council Of Mortgage Lenders report that repossessions in Q3 2009 rose to 11,700, up from 11,400 in Q2. The number of home owners reported to have trouble repaying their mortgage has actually fallen from 204,000 to 195,000.

The Council Of Mortgage Lenders now estimate that around 48,000 will lose their homes. This is still a large number of people and it is up from the 40,000 repossessions in 2008. However, we can put the level of repossessions into context by looking at the Council’s estimations for this year.

At the start of the year, the Council estimated that there would be 75,000 repossessions in 2009. This estimate was reduced down to 65,000 at the end of Q2 and now has been revised down to 48,000.

Why are home owners finding it easier to avoid repossession? The Government did specifically ask lenders to try to avoid repossessions as much as they possibly could. Following the State bailout of banks, we would like to think that the Government has some significant sway over lenders. The more likely reason for these lower than expected repossession rates is the low interest rates that we currently enjoy.

For any borrower on a tracker mortgage, the cost of repayments will have fallen sharply as interest rates have been repeatedly slashed. Any borrower switching to an interest only mortgage is likely to see their monthly mortgage payments markedly reduced.

There are a number of steps that homeowners can take to avoid repossession. Try to build up and maintain an emergency fund that can support you if you if the worst happens and you lose your job. This is doubtless easier said than done in a recession, but make it a long term goal to build up such a reserve. Also look at insurance options that could cover you in the event of accident, sickness or unemployment.

If you think that you are going to struggle with future mortgage payments, then it pays to talk to your lender as soon as possible. The Government has put pressure on lenders to be reasonable and accommodating and they will endeavor to help you find a solution to your difficulties.

Property
repossessions, uk housing