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Fixed rate mortgages good way to avoid arrears

Date: Thu, 28 Jul 2005

Having a fixed rate mortgage could help stop some homeowners falling into mortgage arrears as the number of repossessions continues to increase.

Figures from the Council of Mortgage Lenders (CML) show that the total number of home repossessions and cases of mortgage arrears rose during the first six months of the year – although rates still remain low compared to historical standards.

The number of properties taken into possession increased from 3,070 in the second half of 2004 to total 4,640 in the first half of 2005. Making the half-yearly repossession rate around 1 in 2,500 mortgages, compared with around one in 250 during the second half of 1991.

The total of mortgages in arrears of three to six months rose to 57,220, compared to 53,960 in the second half of 2004. Cases in arrears of six to 12 months stood at 30,980, compared with 26,920 in the second half of the previous year.

"It now seems clear that the second half of 2004 marked the trough in the number of mortgage arrears and possessions," said Peter Williams, CML deputy director general.

"Arrears and possessions now look set to rise a little, but only to the sort of levels experienced in the past few years. A re-run of the early 1990s is certainly not on the cards.


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Endsleigh Insurance Services Limited. Company No: 856706 registered in England at Shurdington Road, Cheltenham Spa, Gloucestershire GL51 4UE.