14 November 2013
New figures released today by the Finance & Leasing Association (FLA) show that the number of second charge mortgage possessions in Q3 2013 was 144, 11.7% lower than in the same quarter in 20121. This has led to a lower forecast of between 700 and 750 for the total number of second charge mortgage possessions by FLA members this year.
Geraldine Kilkelly, Chief Economist at the FLA, said: “The Q3 results mean that the rate of possession fell to its lowest level in a year, at 0.05% of outstanding second charge mortgage contracts. “FLA members are continuing to do all they can to help customers in financial difficulty remain in their homes. This week’s lower than expected inflation and unemployment rates should provide some further relief by easing the pressures on household incomes.”
Table 1: The number of actual properties taken into possession by FLA second charge mortgage providers
|Time period||Number of possessions in the quarter||% change on the same quarter in the previous year||Annual total||% change on the previous year|
|2008 Total 2009 Total Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013||262 230 212 160 195 234 220 178 151 139 163 175 226 183 144||-33.7% -45.8% -48.7% -31.9% -25.6% 1.7% 3.8% 11.3% -22.6%1 -40.6%1 -25.9%1 -1.7%1 49.7%1 31.7%1 -11.7%1||1,612 1,467 864 827 628||-9.0% -41.1% -4.3% -24.1%2|
Notes to Editors
- There are breaks in the time series from Q1 2012 and Q1 2013 onwards because of changes to second-charge mortgage providers in FLA membership. On a same sample basis, the number of repossessions fell in Q3 2013 by 5.9% compared with the same quarter in 2012.
- In 2012, FLA members provided approximately £80 billion of new finance to UK businesses and households. Almost £59 billion of this was in the form of consumer credit, 30% of all unsecured lending in the UK.
- In November 2008, the FLA published Good Practice Guidelines for Second Charge Mortgages. The guidelines gave a commitment to help customers in difficulty by setting out the help that is available and committing lenders to consider each case on an individual basis, taking into account customers’ circumstances. The guidelines make clear that every effort will be made to come to an arrangement with customers in difficulty and that repossession is a last resort.
- FLA members comply with the Pre Action Protocol introduced in 2008, as well as the additional requirements introduced by the OFT for second-charge lenders in possession cases in 2009.