Repossession woes continue
In a worrying development in the housing market, the number of people losing their homes after failing to meet their mortgage repayments has climbed sharply, says the UK’s financial watchdog.
The number of repossessions in the second quarter of the year was 11,054, up 71% compared with a year earlier.
The Financial Services Authority also said the number of people struggling to clear home loan arrears had risen.
The FSA says the number of repossessions has been rising since September last year. The number of people who have fallen behind with their mortgage repayments for at least three months had also been rising steadily for more than a year, the watchdog added. Cases were up 16% on a year ago.
Not all of these will lead to repossessions, and homeowners are urged to contact their lender as soon as they find themselves struggling to make repayments.
This is the second time that the FSA has released figures of this kind, which are based on data from 300 regulated mortgage lenders and administrators. It started collating the figures at the start of 2007.
The Council of Mortgage Lenders has estimated that 45,000 homes in the UK will be repossessed in 2008, up from 27,100 last year.
Loans to borrowers with a chequered credit history represented 2.1% of new lending in April to July, compared with 3.4% a year earlier.
In response to this news the Government has announced plans to ease the repossession crisis. This includes issuing new guidance to Judges regarding dealing with banks claiming houses over debt defaults and ensuring that they have exhausted all other options before attempting repossession.
