CML: Repossessions rise sharply
Figures from the Council of Mortgage Lenders (CML) have revealed a sharp rise in the number of properties repossessed by mortgage lenders.
The organisation said repossessions in the July to September period rose by 12%, while full year numbers are expected to escalate by 70% compared to 2007.
Meanwhile, the number of borrowers in arrears also increased when compared to the previous quarter, by 8%.
As the economy falls into recession and unemployment expected to rise, it is likely that many more people could lose their homes.
Furthermore, homeowners who were on cheap fixed-rate mortgage deals and have now moved to a standard variable rate are also struggling with the increase in monthly mortgage payments.
Michael Coogan of the CML said conditions in the wider economy suggest a worsening picture for mortgage arrears, however carefully lenders handle their treatment of borrowers in difficulty.
The CML remains with its prediction that 45,000 families will face repossession this year, a rise of 72% compared with 2007.
According to Housing Minister, Margaret Beckett, the Government is taking action to protect the most vulnerable families from repossession, which includes a new court protocol to make sure lenders are exploring all avenues before making a claim in the courts.
Meanwhile, the number of buy-to-let mortgages falling three months or more into arrears has risen by 47% in the July to September period. This is as a result of falling rents and an over-supply of properties in some areas, which has meant that landlords are unable to achieve high enough rents in order to support their borrowing commitments.
A report earlier this week from credit ratings agency, Standard & Poor’s, revealed that buy-to-let landlords are facing challenging times.
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