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Homeowners face threat of eviction

Repossession orders increasing as repayments rise

The threat of eviction rose last year with the number of mortgage repossession orders up 29 per cent, figures revealed today.

The Department for Constitutional Affairs said the overall number of court orders made during the year was 91,195, up from 70,843 in 2005.

But figures for October to December showed a drop in both repossession orders and claims when compared to the summer months, with claims also down year-on-year.

Mortgage repossession orders were recorded at 22,827 in autumn, down from the 24,122 seen in the previous quarter.

The number of claims made by lenders showed a bigger drop over the period, from 34,710 to 30,349.

Burdened with debt

But the year-on-year increase in repossession figures is likely to heighten concern that many homeowners are overburdening themselves with debt at a time when mortgage repayments are on the rise.

David Stubbs, senior economist at the Royal Institution of Chartered Surveyors, said: “Court orders to repossess property were 22 per cent above their level at the same time last year, emphasising that many people who are falling behind on their payments are not finding a way out.

“Furthermore, the recent increases in interest rates will strain household finances for many quarters to come.”

As such, the industry body is predicting that the situation will worsen over the next 12 months, with repossessions ending the year higher than at the end of 2006.

Homes under threat

Ray Boulger, senior technical manager at John Charcol, said repossession levels are closely tied to interest rates, with the drop in numbers towards the end of 2006 reflecting a bottoming out of base rate in mid 2005.

But with the figures yet to catch up on the three rate rises over the last six months, families could see the threat of their home being taken away increase as the year progresses.

Mr Boulger said: “In the first half of this year we will see a further drop because of the lag effect.

“But I would then expect to see an acceleration in the second half of this year continuing into the first half of next year.”

Figures for landlord possession actions and orders in the last quarter of the year were down on comparable statistics for 2005.

Between October and December, there were 28,606 claims made against tenants and 21,445 court orders made, both down on the previous quarter.

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