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Homeowners in repossession crisis

25/10/05

The number of homeowners subjected to mortgage repossession orders soared to nearly 20,000 during the past three months, according to official figures released today.

The Department for Constitutional Affairs (DCA) has highlighted the extent to which homeowners are struggling to cope with high mortgage repayments.
Mortgage repossession orders soared 66 per cent in England and Wales compared to the same period last year, the figures reveal.

The total of 19,687 repossession orders made was the highest since the first quarter of 1996, while 29,991 mortgage possession actions were entered in county courts, the highest since the first quarter of 1996.
However, many of the orders are not enforced, as in the first half of the year 54,344 actions were entered, 32,366 orders made, but only 4,640 houses were actually repossessed, according to Council for Mortgage Lenders figures (CML).

Nevertheless, this marked a significant increase on the 3,070 homes repossessed in the last six months of 2004.

Lenders attribute the rise in repossessions to the five interest rate rises between November 2003 and August 2004.

"The increase in mortgage possessions fits with the slowdown in house price inflation," Alan Clarke, UK economist at BNP Paribas, said.

"The conclusion is there are still signs of financial stress among homeowners," he added.
 
However, ShareCast reported the DCA as saying: "The figures report how many possession proceedings have been issued. Since many of the orders made will not have been enforced these figures do not reflect how many properties have been taken into possession."