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Auction and Repossession Trends 2013

Repossession is not generally something that many investors like to concern themselves with too much. But over the last few years it has become of more interest and concern - as the release of repossessed property onto the market has affected supply, the nature of investment properties becoming available at auction and elsewhere and ultimately pricing levels.

Of late, and bearing in mind the state of the wider economy, property repossessions seem to have been occurring at a relatively modest level - and some observers might have expected much higher levels of repossessed property to be reaching the auction rooms by now. Many investors might find it helpful to know whether the situation could change over 2013, perhaps bringing more or fewer distressed properties to auction. So in this report we will look at current levels of repossessions, trends in the auction room and some expert predictions for the coming year.

First of all let us take in some facts and figures on the current situation. According to the Council of Mortgage Lenders (CML), repossessions fell slightly in 3Q 2012 - down to 8,200 compared to 8,500 in 2Q 2012 and 9,600 in 3Q 2011. This was the lowest number of properties taken into possession in a single quarter since 2007. A total of 26,300 properties were repossessed in the first three quarters of 2012 - 8% fewer than in the first three quarters of 2011. The overall repossession rate was 0.07%.

The number of mortgages in arrears remained more or less stable in 3Q 2012, according to the CML. The total number
of mortgages with arrears of 2.5% or more of the outstanding balance rose slightly to 159,100, up from 158,700 in the previous quarter, but still down on the 165,300 in arrears in the same period in 2011.  Levels of arrears in the lower and middle bands remained the same but there was a slight increase in mortgages with the highest levels of arrears (more than 10% of the balance).

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