Repossessions soar 65%
Wednesday, 31 January 2007 12:00
The number of repossessions soared 65 per cent in 2006, new figures reveal.
Data released today by the Council of Mortgage Lenders (CML) shows there were 17,000 repossessions last year, this is 65 per cent higher than in 2005.
But while a considerable increase on the year before, just one mortgage in 690 was defaulted on in 2006 - around the same number as in 2001 and considerably lower than during the property crash of 1991 when there were more than 75,000 repossessions despite there being almost two million fewer mortgage holders in the UK.
Looking forward, the CML predicts the Bank of England's decision to increase interest rates 0.75 per cent in the last six months will see the number of mortgage repossessions rise by 3,000 by 2008.
But while the number of repossessions rose in 2006, the number of mortgages running in arrears dropped 8.5 per cent from 49,010 at the end of 2005 to 44,840 at the end of 2006. Just one mortgage in 260 is currently running in arrears.
There was also a fall in the number of people running three to six months in arrears - from 62,920 at the end of 2005 to 59,100 at the end of 2006.
"The arrears picture at the moment is fairly complex," said CML director general Michael Coogan.
"On the one hand, the wave of problems caused by previous interest rate rises has now worked through, so recently arrears levels have fallen.
"On the other hand, interest rates are rising again, and payment shock may be an issue for some this year as their existing fixed or discounted deals expire.
"Overall, we expect the total number of mortgages at least three months behind with their payments to rise from around 105,000 last year to 130,000 this year, before falling back again to 120,000 next year.
"Repossessions are likely to creep up from around 17,000 last year to 19,000 this year and 20,000 next year - higher than the low of 6,030 in 2004, but still only around a quarter of the 1991 peak of 75,540."
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