Repossessions climbed 68% in 2008 - FSA

Repossessions soared 68% in 2008 while the number of loan accounts in arrears steadily increased, according to the latest mortgage lending data from the FSA.

The total number of loan accounts in arrears has steadily risen since early 2007 to reach 377,000 by the end of Q4, a jump of just over 10% from Q3.

While the number of new arrears cases had remained constant at around 54,000 each quarter since early 2007, the final two quarters of 2008 showed sharp increases. Q3 2008 saw an increase of 10% to 60,000 cases, while results for Q4 2008 show an increase of 13% to 68,000 cases.

The regulator said new lending peaked in Q3 2007 at £102bn before declining to £45bn in Q4 2008, leaving gross lending 26% lower in the quarter, and 48% lower than a year earlier.

"Building societies have an unrivalled track record of helping borrowers with repayment difficulties to allow them to stay in their homes," says Paul Broadhead, head of mortgage policy at the Building Societies Association (BSA).

"Every repossession represents an individual tragedy, but borrowers with building society mortgages can be confident that their lender will, if they contact their lender as soon as possible, develop an individual plan to help them get back on their feet.

He concludes: "This individual approach that societies take is key to keeping people in their homes. Whilst government is introducing a number of schemes to help vulnerable borrowers, they will not be suitable for everyone and certainly no substitute for talking to your building society at the earliest opportunity."