Home repossessions 'go up'

The number of homeowners at risk of losing their homes has risen by nearly a fifth in the past year, figures have shown.

Government data showed that a total of 27,530 mortgage repossession orders were made during the first quarter of this year, up 17% from the same period a year ago. It is also a 9% rise compared to the last three months of 2007.

The number of repossession claims was also 16% up, at 38,688, compared to a year ago, and 7% higher than the previous quarter.

The data offers 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 following the impact of the credit crunch.

A mortgage repossession order is granted by a court and entitles the claimant - usually a lender - to apply to have the occupier evicted. A claim is issued in a county court and begins an action for a repossession order.

The numbers of both actions are at their highest levels for at least six years.

They have climbed sharply during the past six months as the higher cost of mortgages hit homeowners following a series of interest rate rises last year.

They saw many homeowners having to re-fix their mortgages at significantly higher mortgage rates as the cheap fixed loans that they took out several years ago expired.

Despite a fall in the official cost of borrowing over recent months as the Bank of England grapples with a slowing economy, the credit crunch has led to lenders regularly increasing their mortgage rates.

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.

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