THE NUMBER of people in the south under threat of losing their home after failing to pay the mortgage has fallen as owners reap the benefits of low interest rates.

Figures from Ministry of Justice showed the number of families served with a possession order – the final stage before a home is repossessed – in the first three months of the year fell across the region compared with the last year.

The biggest reduction came on the Isle of Wight, where the county court made 23 orders between January and March – down by 55 per cent on the same period in 2008.

In Southampton, the number of possession orders made fell by 39 per cent to 117, while Basingstoke recorded a 49 per cent fall to 34.

A possession order does not necessarily lead to eviction because homeowners are given a final chance to negotiate a compromise with mortgage lenders before they are enforced.

The fall in orders is likely to have been affected by the repeated cuts in interest rates, from five per cent last October to the current 0.5 per cent, as the Bank of England tried to encourage more lending.

People on variable mortgages would have seen their payments fall significantly.

The Government said the fall in possession orders to the “decisive action” it had taken to support struggling families and ensure repossession was used only as a last resort.

Such action included asking lenders not to repossess before a borrower was three months in arrears, ensuring more free legal and debt support was available and expanding free legal representation in county courts for households at risk.

The Department for Com-munities and Local Govern-ment said: “Together these schemes will help to ensure that homeowners who experience a temporary income shock, lose employment, or are otherwise vulnerable are able to remain in their homes.

“However, despite early signs that fewer people will face repossession in the coming months, separate figures from the Council of Mortgage Lenders (CML) showed the Government’s support had come too late for many.

The CML figures showed the number of homes repossessed in the UK rose to 12,800 in the first three months of the year – 50 per cent up on the 8,500 in the same period last year. No local breakdown was available.

Liberal Democrat housing spokesman Sarah Teather said: “These figures make for grim reading. Despite the Government’s attempts to grab headlines, the number of homes being repossessed is still rising.”

Housing Minister Margaret Beckett said: “We are determined to do everything possible to help households facing difficulties with mortgages.”