Rise in repossessed properties in third quarter

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by Lin Freestone

More than 11,300 properties were repossessed during July, August and September, a rise of 12%, according to the Council of Mortgage Lenders (CML). The number of repossession orders made by the courts in England and Wales rose by 3% to 29,516 in the same period.

Michael Coogan, CML’s director general, has not changed his forecast of 45,000 repossessions in 2008 after taking into account the third quarter numbers, but he is more cautious over the prospects for 2009.

He repeated that it is not generally in lenders’ interests to repossess properties and the government needs to play its part with measures to ease the situation in the Chancellor’s Pre-Budget Report.

Housing Minister Margaret Beckett has said the government is taking action to protect the most vulnerable families from repossession. This action includes a new court protocol to make sure lenders are exploring all avenues before making a claim in the courts, a £200m mortgage rescue scheme, more free legal representation in county courts, and more free debt advice.

The number of borrowers in arrears went up by 8% to 168,000 compared with the previous quarter, indicating that more people are being affected by the fall in the economy. More buy-to-let landlords have fallen into arrears than mortgage borrowers generally.