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The number of repossessions fell in the last three months and the number of owners in arrears on their mortgage payments leveled off according to the Council of Mortgage Lenders (CML).

The CML was quick to ensure that lenders took the credit for: ‘Showing forbearance to borrowers where customers are trying to resolve their payment problems and have a realistic chance of doing so'.  But it acknowledged that other factors, notably low interest rates, were playing a key role in keeping repossessions lower than originally forecast.

The results show that there were 11,400 cases of possession (equivalent to one mortgage in 1,000) in the second quarter of 2009, 10 per cent fewer than the 12,700 in the first quarter of the year, but 14 per cent more than in the second quarter of last year.

The data also shows only a modest deterioration in arrears. At the end of June, the number of homeowners in arrears on their mortgage payments by 2.5 per cent or more of the outstanding mortgage balance stood at 205,600 (1.85 per cent of all loans). That compares with a total of 203,900 at the end of March this year and 139,700 at the end of June 2008.

Despite the news, the CML warned that the recession and rising unemployment could push repossessions higher in the coming months.  The CML's head of policy, Jackie Bennett, commented: "With unemployment rising and the economy still weak, the outlook will remain challenging for the rest of this year and into 2010. But today's data shows that lenders are committed to helping borrowers manage their way through temporary payment problems and get their mortgage back on track over time, avoiding possession where possible".