Repossessions rise by 21%
Repossessions rose 21% during 2007, to their highest level since 1999.
The number of homeowners evicted stood at 27,100 but the figure could have been higher without the burgeoning of the sale-and-rent back sector.
Sale-and-rent back is an unregulated industry that purchases indebted homeowners’ properties at low prices and rents them back to households, often with only a six or 12-month shorthold tenancy.
According to the Council of Mortgage Lenders (CML) the number of homes repossessed in 2007 was expected to reach 30,000, so the figure is 10% lower than predicted.
It compares with 22,400 homes repossessed in 2006 and is well below the record 75,500 repossessions during the property crash of 1991.
The CML points out that: “Although repossessions have risen since their remarkable low point of fewer than 10,000 a year in 2003 and 2004, they continue to represent a tiny fraction of all mortgages.”
The Council estimates that less than 0.5% of all mortgages were over six months in arrears at the end of 2007, one-seventh of the level recorded in the early 1990s.
The CML is reluctant to predict the level of repossessions for 2008 but is optimistic, given that interest rates are falling.