'Second-charge' repossessions down in 2011

By Joel Stanier

Second-charge mortgage repossessions fell once again in 2011, according to new figures from the Finance & Leasing Association (FLA).

A 'second charge' mortgage is any mortgage with a second debt secured against it - e.g. a secured personal loan. It can also occur when an unpaid unsecured debt (such as a credit card or personal loan) is secured against the borrower's property due to court action. If they still can't pay the debt back, they could lose their home.

There were 864 such second charge repossessions in 2010, but this fell to 827 in 2011 - indicating that more struggling borrowers may be getting back on top of their debts.

However, the FLA said it expects repossessions to rise once again in 2012 - and the figures in both the third and fourth quarters of 2011 were up on the equivalent period in 2010.

Fiona Hoyle, Head of Consumer Finance at 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% 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 the number of repossessions in 2012."

Image © iStockPhotos

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Tags: repossession, repossessions, mortgage, second charge, second charge mortgages, FLA, debt, mortgage debt, mortgage arrears

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