Repossessions set to tumble

Northern Ireland and Greater London will have the highest repossession rates, standing at 0.82% and 0.33% of properties.

There are approximately 25,057 UK repossessions forecast for 2014.

Damian Riley, director of business intelligence at HML, said the results indicated that the economy was improving. But he stressed that lenders need to keep looking after borrowers when they fall into arrears to prevent the devastation of a repossession.

He said: “Higher levels of free equity where the borrower is in arrears and cannot make mortgage payments could potentially have an influence on the lender’s decision to repossess.

“Inflation may have fallen to the Bank of England’s 2% target but wage growth stands at less than one per cent. Household finances are still going backwards, albeit at a slower pace.

“The question needs to be asked whether lenders will become tougher during 2014 as property prices climb amid ‘perceived’ improving household finances. If this scenario happens, repossessions could actually be higher than we have forecast.”

The region with the lowest predicted repossession rate is the South West at 0.18%, which represents 1,425 properties.