CML: Repossessions up 48% in year

08-08-2008

CML: Repossessions up 48% in year
New figures from the Council of Mortgage Lenders (CML) reveal the number of repossessions in the UK property market has soared as more borrowers slip into arrears.

Some 18,900 homes were taken into possession by lenders during the first half of the year, up by some 48 per cent when compared with the same period of last year, when 12,800 homes were repossessed.

The possession rate - the proportion of all mortgages on which possession occurred in the period - was 0.16 per cent in the first half of the year, up from 0.11 per cent in both the first and second halves of 2007, finds the CML data.

As a result, the possession rate now is similar to that of the late 1990s, but remains less than half the rate experienced during the last housing slump in the early 1990s.

There was also a steep increase in the number of homeowners slipping into arrears of three months on or more on mortgage payments.

The total number of households falling behind was 155,600 at the end of the first half of the year, up from 129,600 at the end of 2007 and 120,800 at the end of the first half of last year.

The arrears rate stood at 1.33 per cent of all mortgages, up from 1.10 per cent at the end of 2007 and 1.02 per cent at the end of the first half of last year.

"The number of people facing difficulty needs to be kept in perspective," explained CML director general, Michael Coogan.

"The good news is that most people are coping well and continuing to pay their mortgages in full, despite the higher costs of food and fuel and the higher mortgage rates now prevailing in the market for those coming off cheaper original deals," he added.

Despite the recent increases, the CML is maintaining its forecast of 45,000 total possessions and 170,000 mortgages in arrears of more than three months by the end of the year.

These numbers remain extremely small when seen in the context of the 11.74 million mortgages in the UK, argues the trade body, which represents 98 per cent of all residential mortgage lending in the UK.

"It is inevitable that more borrowers' coping strategies will come under pressure in current conditions than in the unusually benign years of the last decade," continued Mr Coogan.

"That's why lenders, government and the advice sector are working closely together to minimise the impact on borrowers."

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