Repossessions begin to accelerate

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by Kay Murchie

According to figures from the Council of Mortgage Lenders (CML), repossessions have been on the increase since the latter half of 2004 but the rate is now starting to accelerate.

The CML has revealed that 18,900 homes were taken into possession by lenders during the six months to the end of June. This represents a 41% increase compared to the same period in 2007, when 12,800 homes were repossessed.

Meanwhile, the number of borrowers falling behind on their mortgage payments has risen and is up by one fifth in the first six months of 2008 to 155,600.

The arrears rate stood at 1.33% of all mortgages, up from 1.10% at the end of 2007.

Commenting on the figures, Michael Coogan of the CML said the number of people facing difficulty needs to be kept in perspective.

Despite higher mortgage rates for those coming of fixed-rate deals and rising food and fuel costs, borrowers are managing well and are continuing to pay their mortgages in full, added Mr Coogan.

The CML, which represents 98% of all residential mortgage lending in the UK, is sticking to its prediction of 45,000 total repossessions and 170,000 mortgages in arrears of more than three months by the end of 2008.

However, the Council adds that these figures are small when taken in the context of the 11.74 million UK mortgages.

It was announced yesterday that Legal Aid schemes are to be expanded in British courts in a bid to deal with rising repossessions.

The Legal Services Commission (LSC), the Government body that administers Legal Aid, has confirmed that an additional 20 emergency Legal Aid schemes are to be set up at county courts.

The free legal scheme could be the difference between people keeping and losing their homes.

Homeowners in danger of being evicted can call the Community Legal Advice helpline on 0845 345 4 345.