Repossessions rise 71%

Tuesday, 28 October 2008 03:01

The number of homes being repossessed rose 71 per cent in the last year, according to new data from the Financial Services Authority (FSA).

A total of 11,054 homes were repossessed in the second quarter of 2008, bringing the number of homes repossessed by lenders in the first half of the year to over 20,000.

The data also show the number of people falling into arrears is remaining steady - up three per cent on the first three months of the year and up 16 per cent on a year ago.

However, those falling behind on their loans - covering 312,000 mortgages - are struggling to clear their arrears, so falling closer to repossession.

The Council of Mortgage Lenders (CML) meanwhile stood by its prediction that repossessions over 2007 will stand at 45,000 - representing 0.38 per cent of all mortgages.

Last week lenders promised to make repossession the "last resort".

New rules and guidelines were introduced to help struggling borrowers gain access to advice and debt counselling services.

Lenders will also have to prove to courts they have tried to discuss and agree alternatives to repossession with borrowers getting into trouble as well as outlining how the protocol has been met. The upshot being if lenders have failed to tick all the boxes then a repossession cannot go ahead.

Earlier this month Citizens Advice reported a rise of 35 per cent in the number of people with enquiries about mortgage and secured loan arrears problems over the last 12 months.

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