House repossessions soar to 12-year highNumber of homes taken back by lenders up 48%
09 August 2008
The number of UK house repossessions jumped by 48% in the first half of the year to its highest level for 12 years.
A total of 18,900 homes were taken back by lenders after their owners failed to keep up with mortgage repayments - the equivalent of 0.16% of all mortgages, the Council of Mortgage Lenders said.
The CML forecasts that 45,000 homes will be repossessed by the end of the year as cash-strapped borrowers struggle to repay their mortgages.
The CML said the rate of repossession, at 0.16%, was now the highest seen for 10 years.
But it stressed this was still low in the context of the entire mortgage market and less than half that experienced amid the housing market crash of the early 1990s.
Today's figures also reveal that the number of mortgages three months or more in arrears has risen by 29% year on year to 155,600 at the end of the first half.
This is equivalent to 1.33% of all home loans, although the number of mortgages more than six months in arrears was 0.58% of all loans.
The CML recently set out plans to minimise the number of people who have their homes repossessed as the figures soar higher following the credit crunch.
It said members had committed to four measures to help borrowers, including reviewing its own policies and a pre-action protocol to ensure that repossession is a last resort.
However, a Financial Services Authority review earlier this week found that specialist mortgage lenders were too quick to take borrowers to court and were focusing their efforts too strongly on recovering arrears.
The FSA is also considering referring several firms to enforcement action after uncovering irresponsible lending practices among lenders, particularly those in the sub-prime market, such as failure to check borrower income.
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