At the beginning of last year, the Council of Mortgage Lenders (CML) predicted that we would see somewhere in the region of £75,000 individual repossession cases in the UK for the year, form borrowers who had defaulted on their home owner loans, or other secured loans.

In September last year, this figure was revised to 48,000 and in the event, there were actually 46,000 homes repossessed. Although this is significantly lower than the CML’s original prediction, it is still the highest level of loan repossession in the past 14 years and an increase of 15 per cent above the figure for 2008.

The previous highest number of repossessions in a single year was back in 1995, when 49,900 homes were repossessed due to borrowers failing to keep up with the repayments on their home owner loans.

The good news, if there could be some in such a case, is that the number of repossessions actually fell during the last two quarters of the year, with 13 per cent fewer cases in the last three months of the year, compared with the third quarter.

Although the number of cases has fallen, the CML is still predicting that this year will still be a difficult one for people with home owner loans, with a total of 205,000 cases of loan arrears and a possible 53,000 repossession cases through loan arrears and defaults.

Michael Coogan of the CML commented on the figures, he said “This year will be a challenging year for many borrowers, and some households will inevitable find their finances being squeezed if and when interest rates eventually rise. But borrowers should be reassured that lenders want to help them keep their homes wherever possible.”

When a person buys their first home and takes out their first home owner loan or mortgage, it is usually for a term of 25 years and the date of final repayment of the loan may seem like an awful long way away.

But nearly two thirds of those individuals with a loan secured on their home are aiming to have it completely paid off by the time they reach the age of 50, according to new research published by the Co- Operative Bank.

The survey has found that around 62 per cent of people with a home owner loan or mortgage intend to be debt free by age 50 and use the money they are saving on loan repayments for other purposes, such as additional funding for retirement planning, taking more holidays, or taking early retirement or reducing their working hours.

The recent economic conditions and banking crisis in the UK has actually helped many people with loans to realise their dreams of being able to repay their loans earlier than originally anticipated.

Almost a full year of extremely low interest rates has meant cheap loan repayments for many borrowers and this has allowed many people to make regular overpayments on their home owner loan in order to reduce the outstanding balance and pay it off early.

James Hilton of the Co Operative said “The research clearly shows that many mortgage holders are looking to take advantage of the low interest rate environment by making overpayments. Since the launch of our capital repayments pilot scheme we have had significant interest from customers and as a result we are continuing to monitor the scheme in detail, with a view to rolling out the scheme to more customers if successful.”

For the past twelve months or more now, first time buyers have had a particularly difficult time trying to get themselves on to the housing and home owner loan markets.

The difficult economic conditions and tight lending criteria from banks and building societies when it comes to maximum loan to value levels, have meant that many individuals who want to buy a house simply have not been able to afford the monthly loan repayments, or raise sufficient deposit.

But the latest figures from the Council of Mortgage Lenders (CML) have revealed that December last year saw the highest number of new loans to first time buyers over the past two years. The CML say that this is largely due to a last minute rush of first time buyers taking loans out on properties valued below £175,000 in order to get in before the end of the stamp duty holiday.

There were a total of 24,900 new home owner loan granted to first time buyers in December, with a total value of £2.9 billion. This equates to an increase of 26 per cent in loan numbers in the space of one month alone.

55 per cent of these new loans were on properties valued at less than £175,000 as buyers rushed to beat the stamp duty deadline at the end of the year. For those buyers who failed to complete prior to the end of December, their purchase will cost them up to an additional £1,750 in stamp duty, provided that the property is valued between £125,000 and £175,000.

The majority of new home owner loans taken out towards the end of the year were on a repayment basis, rather than interest only and the typical first time buyer was spending around 21 per cent of their gross salary on their loan repayments each month.

Following a year of high interest rates and low loan to value ratios from banks and building societies on their ranges of home owner loan and mortgage products, many people have been relieved to see new loan products enter the market, which advertise lower interest rates and higher loan to value ratios from lenders.

Although this seems like good news on the face of it, according to new research from Moneyfacts, it appears that it is possible for a potential borrower to get a loan with either a cheap rate, or a high loan to value, but not both.

Although generally the average rate on a loan has reduced steadily over the course of the past few months, this is largely due to cheap loan rates being offered on home owner loan products which require a large deposit form the borrower.

It is true that there are a growing number of high loan to value products entering the market, but as average loan rates are decreasing, it seems that the average rate on a high loan to value product is actually increasing.

The average interest rate on a loan offering 90 per cent loan to value now stands at 6.48 per cent, compared with the average rate for a 75 per cent loan to value product of just 4.27 per cent. This means that someone with a 90 per cent loan is likely to pay somewhere in the region of £4,728 more than someone with just 75 per cent loan to value over a two year period, for the same amount of loan.

Michelle Slade at Moneyfacts said “While lenders are slowly increasing the number of deals available to those with a small deposit, which should be good news for first time buyers, they continue to make them pay a heavy price.”

“First time buyers are being offered little incentive to enter the market and there are no real signs of things getting better anytime soon for those with a small deposit.”

The Bank of England base rate of interest for loans and savings has now been at its record low level of just 0.5 per cent for almost a full year now and has still not gone up, despite the consumer prices index (CPI) taking a sudden leap towards the end of last year.

Recent talk of increasing interest rates has caused a certain amount of worry amongst those people with home owner loans on standard variable rates and tracker rates, as this would lead to a rise in their monthly loan repayments and as a result of this, a few borrowers are now looking at a fixed rate loan, in order to tie in to low rates.

However, a recent survey amongst financial advisers has found that almost one third of them do not expect to see the cost of a loan increase for at least one more year.

The survey, which was conducted by AXA, Baring Asset Management and Cazenove Capital, has revealed that only 6 per cent of financial advisers expect the Bank of England Base Rate of interest to increase within the next three months, around one quarter thought it would take six months for rates to rise and 28 per cent have predicted no increase for around nine months.

Ten per cent of financial advisers even said that they did not expect to see the cost of a loan or savings rates increase for two years yet.

Whilst the thought of continued low monthly repayments is good news for those people with an outstanding home owner loan or personal loan, it not as encouraging for people with savings, many of whom are now seeing a minimal return from their money and are desperately looking around the market place to find a better home for their investments.