Repossessions reach eight year high

Repossessions in Britain during 2007 reached 27,100, the highest level since 1999, new research from the Council of Mortgage Lenders (CML) reveals.

However, the CML says the figures are 10% lower than the 30,000 it had forecast and says repossessions represent a tiny fraction of all mortgages.

Despite the credit crunch in the summer, repossessions were evenly distributed throughout the year, with 13,600 in the first six months of 2007 and 13,500 in the second half of the year.

The figures mean roughly 1 in 400 mortgages ended in repossession during 2007, roughly half the rate experienced in the first half of the 1990’s.

Michael Coogan, director general of the CML, says lenders are doing what they can to help borrowers that face repayment difficulties, but warns that repossessions are likely to increase in 2008.

“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.

"No-one is necessarily to blame for this - even the best risk assessment cannot provide a crystal ball insight to the future for each particular borrower,” he says.

The CML, in conjunction with Citizens Advice and Shelter, has called on the government to provide support to homeowners through the benefits system.

At present, tenants are able to have their rent paid through housing benefit if they were to lose their income, but homeowners do not qualify for housing benefit and have no support if they become unemployed or ill.

Coogan urged homeowners who are facing difficulties to contact their lender, saying problems are easier to solve if they are tackled at an early stage.

Richard Farr, director of AMI, adds: "It is likely to be a difficult year for consumers in 2008 and good advice will be more important than ever. Advisers can play an important role in helping consumers manage their debts.

"There are lots of ways for consumers to get out of difficulty and it is important to for them to stay in close contact with their lender and seek advice at the earliest opportunity."

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