Secured Loan Repossessions Fall
The majority of home owners in the UK try to ensure that they keep up to date with the repayments on their home owner loan or mortgage ahead of any other loans, such as unsecured loans or credit cards, so as to avoid loan arrears and the threat of repossession.
However, many of these same borrowers also have a secured loan on their home and in many cases individuals have had their home repossessed, not through arrears on their main home owner loan, but due to arrears and defaults on a secured loan, or second charge loan which is secured on it.
Despite the tough economic times in the UK at the moment, the number of properties being repossessed due to failings on a secured loan has fallen by around 4.3 per cent over the course of last year, compared with the previous twelve months.
The figures come from the trade body, the Finance and Leasing Association (FLA), which show that there were a total of 827 properties which were repossessed through secured loan arrears throughout 2011, although loan repossessions did increase during the final three months of last year, compared with 2010.
Overall, repossession levels on secured loans and second charge loans have now fallen for three consecutive years according to the FLA, however, the trade body has predicted that this trend is likely to be reversed throughout the next twelve months, as unemployment increases, leading to higher levels of loan arrears.
Fiona Hoyle of the FLA said “Repossession levels have fallen for the third consecutive year as lenders continue with forbearance measures aimed at helping customers in financial difficulty to remain in their homes. These measures have been shown to work, as total repossessions are 48.7 per cent down in 2011 on the total in 2008.”
“Repossession remains the last resort if all other measures have failed. However, economic uncertainty persists and we may see this reflected in a slight rise in loan repossessions in 2012.”
