FSA: Repossessions soar by 71%

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by Kay Murchie

The Financial Services Authority (FSA) has released figures today showing that the number of people losing their homes during the three months to the end of June, surged by 71% compared with the same period a year earlier.

In the three months to the end of June, 11,054 homes were repossessed, compared with just 6,476 during the same period in 2007, according to the FSA.

This FSA’s figures are based on data from 300 regulated mortgage lenders and administrators.

According to the watchdog, the number of repossessions has been rising considerably since the third quarter of 2007 as a growing amount of homeowners struggled to clear mortgage arrears. Over the last year alone, borrowers have not only been hit by rising mortgage costs, but soaring energy bills and higher food and petrol costs have taken their toll.

In related news, the Bank of England’s Financial Stability Report has estimated that half a million homeowners in the UK are in negative equity due to tumbling house prices.

Last week, credit ratings agency, Standard & Poor’s, said tumbling house prices are pushing 60,000 homeowners each month into negative equity.

Since their high in October last year, UK property prices have fallen 13% according to the Halifax and the Nationwide.

Reports over the last week are mixed as to how much property prices will fall with economic forecasting agency, Capital Economics, predicting that house prices will fall 35% by next autumn, from their peak of last summer.

Meanwhile, Knight Frank estate agents said house prices in the UK will fall 30% from their high of summer 2007 and fall to levels seen in September 2003.

Yesterday, however, the Centre for Economics and Business Research (CEBR) has predicted that house prices will fall in value by 25% from their peak. The organisation believes that house prices will not recover to the levels they peaked at in 2007 until 2013.