Home repossession figures due out

Last Modified: 09 May 2008
Source: PA News

The number of homeowners unable to keep up with higher mortgage payments are being revealed with the publication of figures for repossession orders.

The Ministry of Justice is publishing figures showing how many repossession orders for homes in England and Wales were made through the courts during the first quarter of the year.

The data will offer an early indication of homeowners' ability to cope with higher mortgage repayments as a result of coming to the end of short-term fixed rate deals and the impact of the credit crunch.

The number of homes repossessed soared by 21% during 2007 to reach an eight-year high, according to figures from the Council of Mortgage Lenders.

It said a total of 27,100 homes were taken back by lenders in 2007 after their owners failed to keep up with mortgage repayments, more than triple the number three years ago.

It has pencilled in an even bigger rise for 2008, estimating that 45,000 people will lose their homes this year due to being unable to keep up with mortgage repayments.

But this forecast was made before the full impact of the credit crunch became clear.

The problems in the wholesale money markets have led to lenders regularly increasing their mortgage rates, despite the official cost of borrowing falling.

It has also made them increasingly risk averse, suggesting some people coming to the end of short-term deals will have trouble remortgaging and will instead have to go on to their lenders' more expensive standard variable rate.

A spokeswoman for the CML, which is not due to publish figures on repossessions until August, said: "Arrears and possession rates are currently running within this forecast, and the CML is tracking them closely."

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