The number of people in the UK whose homes were repossessed last year rose by 21 per cent, to 27,100, compared to 22,400 in 2006, figures released yesterday revealed.
The Council of Mortgage Lenders (CML) said 27,100 was the highest figure since 1999 for homes taken over by lenders after people fell behind with repayments.
CML director general Michael Coogan warned: ‘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.’
The CML added that the numbers of mortgages behind on payments last year rose by 8.6 per cent compared to 2006.
Added cost pressures on homeowners are expected this year, owing to higher energy and food bills, while more than a million people are coming off fixed-rate mortgages.
Head of consumer policy at Citizens Advice, Sue Edwards said: ‘Not only have the number of repossessions increased by 21 per cent in the past year, but the total number, at 27,100, is almost twice the total two years ago in 2005.
‘These increased figures reflect what Citizens Advice Bureaux are seeing nationwide.
‘Last year, we dealt with over 57,000 problems about mortgage and secured loan arrears, an 11 per cent increase on the previous year.
‘The growth we have seen of so called “mortgage rescue” or “sale and rent back” schemes targeting people at risk of repossession may also mean the actual repossession figures tend to understate the true scale of the problems faced by borrowers at the margins of affordability.
‘The findings of our December 2007 report on home ownership and debt Set up to fail showed that the current safety nets for homeowners on low incomes facing payment problems, such as income support for mortgage interest (ISMI), are completely inadequate.’
Edwards added: ‘Our evidence shows that lenders are not always doing everything they can to help borrowers in trouble, all too often piling on extra charges and being too quick to take court action rather than being prepared to negotiate affordable repayment arrangements.
‘We want to see all lenders being reasonable when dealing with customers who do get into trouble, and taking court action for possession only as a last resort.
‘We also want to see tougher enforcement of existing regulation of mortgages, and for the same regulatory system to apply to all mortgages and other secured lending in future, instead of the fragmented regime that currently applies.’
Yesterday’s repossession figures follow Monday’s figures from the Insolvency Service, which said the number of people declared insolvent in 2007 fell marginally by 0.6 per cent last year to 106,645, compared to a record high in 2006.
Bankruptcy orders were 2.4 per cent higher than 2006 at 64,480, but Individual Voluntary Arrangements were down 4.9 per cent to 42,165 last year compared to 2006.
