House repossessions at eight-year high (February 10, 2008)

House repossessions at eight-year high

House repossessions are at an eight-year high, having risen over 20 per cent in 2007, figures have shown.

A total of 27,100 homes were taken back by lenders after their owners failed to keep up with mortgage repayments. The figure is the equivalent of 0.23 per cent of all mortgages, the Council of Mortgage Lenders said.

But, the CML said the figure is 10 per cent lower than previously estimated and well down on the high of 75,540 repossessions reached during the 1991 housing crash.

Overall, fewer than one in 400 mortgages led to a home being repossessed during the year, less than half the level seen during the first half of the 1990s.

At the same time, the predicted increase in repossessions during the course of 2007 failed to materialise, with just 13,500 homes taken over by lenders during the final six months of the year, compared with 13,600 during the first half.

The CML said that although repossessions had risen from their recent low of fewer than 10,000 a year in 2003 and 2004, they continued to represent a tiny fraction of all home loans.

The number of mortgages that were in arrears of more than three months rose by nearly 9 per cent during the year to 129,800, the equivalent of just over 1 per cent of loans.

But less than 0.5 per cent of mortgages were in arrears of more than six months - around a seventh of the level seen during the early 1990s. The CML said it is difficult to forecast what the likely level of arrears and repossessions would be in 2008.

Michael Coogan, director general of the CML, said: "Lenders take their responsibilities to borrowers facing repayment difficulties very seriously, and many go to exceptional lengths to provide debt counselling, reschedule payments, extend loan terms, or in some circumstances even allow payment breaks.

"Despite this, the number of repossessions is likely to be higher in 2008 as a result of wider issues in the economy and the mortgage funding markets."

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