Home repossessions up in Q3

By Christina Fincher and Fiona Shaikh

LONDON (Reuters) - The number of Britons losing their homes to repossession rose slightly in the third quarter but there was a drop in the number of households in arrears and courts ordered fewer homes to be seized.

The Council of Mortgage Lenders said low interest rates and government measures to help borrowers avoid court action meant it now expected just 48,000 homes to be repossessed this year, down from a forecast of 65,000 in June and a forecast of 75,000 a year ago.

"The data indicate that government initiatives to reduce repossessions by requiring lenders and borrowers to examine all alternatives is having a significant beneficial impact," said Howard Archer at Global Insight.

"Home repossessions now look like being much less than feared."

CML figures showed the number of homes repossessed by lenders nudged up to 11,700 in the three months to September, a rise of three percent compared with the second quarter and five percent compared with the same period a year ago.

However, there was a fall in the number of people who fell behind with their mortgage repayments, suggesting conditions have started to stabilise.

ARREARS DOWN

The number of loans in arrears by 2.5 percent or more of the outstanding mortgage balance totalled 194,600 in the third quarter -- 1.77 percent of the total -- down from 204,200 at the end of June.