A steep increase in repossessions

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by Kay Murchie

Figures published by the Council of Mortgage Lenders (CML) have showed a significant rise in the amount of homes that were taken from borrowers unable to keep up with mortgage repayments this year. The number of homes repossessed by mortgage lenders has increased by almost a fifth during the first six months of 2007.

The CML said 14,000 homes were repossessed in the first half of 2007, 18% more than during the latter half of 2006 and 30% above the first half of 2006.

In addition, 125,100 homeowners had mortgage arrears of 3 months or more. According to CML, around 1 in 840 mortgages end in repossession. The CML added that the higher risk involved in lending money to people who could not get mainstream mortgages meant that more repossessions were likely at an earlier stage of arrears.

A spokesperson for the CML commented that the steep rise in repossessions in the first half of 2007 has been powered by a number of things, but the total number of repossessions is still low by previous standards. Interest rates are much higher than many were expecting and are set to remain so.