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Repossessions leap 48%

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by Gill Montia
Repossessions leap 48%

The number of home repossessions rose by 48% in the first six months of the year, to 18,900.

When compared with the second half of 2007 the figure is 41% ahead.

Latest intelligence from the Council of Mortgage Lenders (CML) also shows an increase in the number of homeowners falling behind with their mortgage payments.

Arrears rose by 29% in the first half of 2008, to 155,600, up from 120,800 over the same period of 2007.

The CML’s director general, Michael Coogan, says he expects the figures to increase in line with the Council’s forecast of 45,000 repossessions and 170,000 mortgages in arrears (of more than three months) by the end of the year.

However, Mr Coogan points out that there are 11.74 million mortgages in existence in the UK and those causing a problem represent a small proportion of this total.

During the first half of the year, 0.16% of all mortgages ended in repossession, a rate less than half that seen in the early 1990s.

According to the CML, so called sub-prime borrowers (those with poor credit histories) are bearing the brunt of the rise in repossessions.

Earlier this week, the Financial Services Authority (FSA) reminded mortgage lenders of their obligation to treat customers fairly.

In a recent review, the regulator found weaknesses in the way some lenders have been dealing with arrears and repossessions, particularly for consumers with impaired credit histories.

According to the FSA, mortgage providers specialising in this area have a tendency to take court action too readily.

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News posted: August 8, 2008

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