Home repossessions leap towards 47,000

The Financial Services Authority (FSA) has reported a sharp rise in home repossessions and mortgage arrears.

During 2008, lenders repossessed a total of 46,750 properties, up from 27,900 in 2007.

Cases of mortgage arrears of three months and more rose 31% over the year, to 377,000.

The increase accelerated during the final quarter with around 68,000 homeowners moving into arrears, or 13% more than in the previous quarter.

Mortgage arrears increased throughout 2008 and jumped 10% in the third quarter of the year.

As a result, the number of mortgages in arrears as a proportion of all home loans rose to 3.37% at the end of 2008, up from 2.26% a year earlier.

Meanwhile, the repossession rate actually slowed during the final quarter of 2008, with 13,028 properties returned to lenders, 436 fewer than in the previous three months.

The change may reflect Government measures introduced in November which oblige courts only to grant repossession orders if it can be shown that alternative methods of managing a mortgage debt have failed.

The FSA’s figures are higher than those produced by the Council of Mortgage Lenders (CML) last month because the regulator’s data includes second charges.

CML’s figures show home repossessions rising to 40,000 during 2008, a 54% increase on 2007 but 5,000 fewer than forecast by the body.

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