Matthew Wall, Friday August 08, 2008
The number of UK house repossessions jumped by 48% in the first half of the year to its highest level for 12 years, according to shock new figures. How long will the misery last? And what can you do to protect yourself? We reveal all
The number of repossessions has soared by 48% over the past six months and the number of people
who have lost their homes is at its highest level for 12 years, figures showed today.
A total of 18,900 homes were taken back by lenders after their owners failed to keep up with
mortgage repayments - the equivalent of 0.16% all mortgages, the Council of Mortgage Lenders said.
The CML forecasts that 45,000 homes will be repossessed by the end of the year as
cash-strapped borrowers struggle to repay their mortgages.
Mortgage fears
Government watchdog the Financial Services Authority (FSA) has warned that more than one
million mortgages are a "cause for concern" - which means that those homeowners could experience
problems meeting their monthly repayments over the coming year.
The FSA's latest Financial Stability Report identifies three factors that could leave homeowners at risk of repossession - putting down a deposit of 10% or less on a home; taking out a mortgage for longer than 25 years; or borrowing more than 3.5 times the customer's annual salary.
More than one million mortgages currently have at least two of these risks attached - with 150,000 having all three. Separate research from banking body the Council of Mortgage Lenders (CML) show that repossession levels have risen sharply. More than 27,000 properties were repossessed last year - up 20% on 2006 levels and almost twice the number seen in 2005 - and the situation is set to worsen still further this year.
An additional concern is the fact that these people have been insulated from the interest rate rises seen in 2006 and 2007 - and may struggle to cope with a sudden, sharp increase in their monthly repayments. The CML estimates that some 1.4 million of these fixed-rate deals will end in the coming months - leaving thousands of young homeowners at risk of repossession.
