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Homeowners may find this year to be tough in terms of managing money, new research indicates.

According to a study carried out by the Council of Mortgage Lenders (CML), the number of properties repossessed over the course of last year was slightly below the institution’s estimates. During 2007, it was thought that 30,000 homes would be reclaimed by lenders, however the actual figure stood at 27,100 - some ten per cent less than predictions.

However, the council claimed that there could be difficulties in predicting levels of repossessions and arrears as this year progresses. It was stated that following the decision by the Bank of England’s monetary policy committee to cut the base rate of interest both in December and yesterday (February 7th) the prospect of higher mortgage costs appears to be negated. Meanwhile, it was stated that funding pressures, which are having an impact on adverse credit loans and other types of adverse borrowing, could affect arrears and repossessions.

And in developing problems with meeting mortgage repayments it is possible that homeowners may struggle with other sources of financial demand. Such areas could well include credit and store cards, UK loans, utility bills and transport costs.

Michael Coogan, director general for the CML, claimed that money lenders are increasingly taking their responsibility towards those borrowers with problems in meeting demands for repayment “very seriously”. He advised that many organisations are prepared to go to “exceptional lengths” to help their consumers reschedule payments or are even allowing them to take a break from having to make reimbursements. Providing debt counselling and extending the term of a loan were also put forward as ways in which lenders attempt to reduce financial pressures that their customers face.

He said: “Despite this, the number of repossessions is likely to be higher in 2008 as a result of wider issues in the economy and the mortgage funding markets. No one is necessarily to blame for this - even the best risk assessment cannot provide a crystal ball insight to the future for each particular borrower. But that is all the more reason to ensure that there is a fair and reasonable balance of responsibility between consumers themselves, their advisers and lenders and the system of state support to ensure that home ownership remains sustainable and that repossessions are minimised.”

Mr Coogan went on to warn that those who are concerned that they may be developing money difficulties should get in touch with their financial provider as soon as possible. He added that lenders are just as keen to avoid repossessions as borrowers are.

For homeowners worried about their capacity to meet mortgage repayments taking out a low cost consolidation loan could be advisable. Although it represents another demand on their finances, such a loan could help borrowers pay off a number of spending constraints into a single monthly repayment. Earlier this year, Heather Choudhary, specialist debt adviser at the Bradford branch of Citizens Advice, claimed that the first few months of the year often see more people become concerned about managing their finances after overspending during the festive season.

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