Repossessions up 30 per cent

Last Modified: 03 Aug 2007
By: James Blake

As high interest rates bite the number of people forced out of their homes has risen sharply over the last year.

House repossession figures out today make depressing reading. But it's too easy just to blame interest rates.

Lenders are accused of selling mortgages to people who simply can't afford to pay. It's called sub-prime lending.

In the first six months of this year 14,000 homes have been repossessed. That's up 18 per cent on the previous six months - and up 30 per cent from last year. There are also 125,000 mortgages in arrears.

And, these figures don't include people who consolidate debts on their homes. Channel 4 News has learnt this may be causing thousands of extra repossessions - but no agency collects those figures.

This news comes as banks and mortgage lenders reach record profits. The Royal Bank of Scotland - which owns Nat West - has just announced pre-tax profits of £5bn.

And if interest rates aren't bad enough, the recent floods will impact on finances too.

Norwich Union workers assess the damage around Gloucester. The company, which uses the catchphrase "quote me happy" has now said it's insurance premiums will go up by 10 per cent. Other banks are likely to follow suit.