A Big Jump In Mortgage Repossessions

Figures released today show that a rise in the number of people struggling to keep up with their mortgage has led to a jump in repossessions.

A total of 9,100 homes were repossessed in the UK in the first three months of 2011, up 15% on the previous quarter, lenders say.

This in turn has led to and increase in the number of people seeking debt help and advice with numbers expected to rise throughout the year.

Figures have also been released by the Ministry of Justice for each court and local authority across England and Wales.

Birmingham still has the most repossession claims in England and Wales. The city's county court recorded 2,185 claims last year - the most recorded in any of the counties.

Hartlepool, in the North East, saw the biggest actual rise in mortgage possession claims - an 83% increase, and Corby, in the East Midlands, is still the local authority with the highest rate - 2.61 claims per 1,000 households over the three-month period. Debt Advisors at Integrity have warned that the expected increase in interest rates will also lead to more home repossessions and the number of people declaring personal insolvency will rise sharply due to this.

The number of properties taken over by lenders has fallen for the past five consecutive quarters, with just 7,900 people losing their home during the final three months of 2010 – the lowest level since the Council of Mortgage Lenders (CML) first started collecting the data on a quarterly basis in 2008.

But despite only 36,300 properties being repossessed during the whole of 2010, the lowest level since 2007, the group has predicted an increase in the number of people who will lose their homes this year to 40,000.

Figures released by City watchdog the Financial Services Authority (FSA) also showed the first rise in the number of people who had fallen behind with their mortgage for two years during the final quarter of 2010.

The regulator said 38,800 homeowners got into mortgage arrears of at least 1.5% of the amount they owed during the three months, 6% more than during the previous quarter, although both the CML and the FSA showed a fall in the total number of people who were behind with repayments.

Data released by the CML and Ministry of Justice will show whether there was an increase in repossessions and repossession orders during the first three months of this year, as well as how many people are in mortgage arrears.

Repossession levels have remained lower than expected during the economic downturn due to a combination of low interest rates, Government support schemes and increased forbearance by lenders.

The previous government launched a number of initiatives to help struggling homeowners, including the Mortgage Rescue Scheme, under which people can sell some or all of their home to a social landlord and rent it back, as well as the Homeowner Mortgage Support Scheme, which enables people to defer paying interest on up to 70% of their mortgage for up to two years.

It also introduced a pre-action protocol, under which the courts can grant a repossession order only if all alternative measures to keep people in their homes have failed.

But there are concerns that some of these measures are simply delaying a spike in repossession numbers. It is also thought that an increase in interest rates from their current record low of 0.5% could tip more people over the edge, while high inflation, low wage increases, tax rises and benefit cuts are continuing to put pressure on households" income.

If you are struggling with arrears and need advice then call Integrity now for professional debt advice and help on 01743 272900

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