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Number of houses repossessed increases |
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Friday, 03 August 2007 |
The Council of Mortgage Lenders has published its half-yearly data on mortgage arrears and possessions, and has found that 14,000 properties were taken into possession in the first six months of the year, an increase of nearly 18 per cent compared with the previous half-year, and nearly 30 per cent compared with the first half of 2006.
The report states that, although the number of repossessions is significantly higher than in the recent past, when possessions reached extremely low levels, it remains low by historical standards, as it equates to around 1 in 840 mortgages ending in possession in the first half of this year.
The report also found that the number of mortgages in arrears of three months or more at the end of June rose to an estimated 125,100, an increase of 4 per cent compared with the end of December 2006, but 3 per cent lower than at the end of June last year.
Of these, the majority, 71,800, were in arrears of 3-6 months, while 38,300 were in arrears of 6-12 months, and 15,000 more than 12 months. Around 1 per cent of all mortgages were in arrears - a proportion has been stable at low levels for several years.
Michael Coogan, CML director general, said: “The sharp rise in repossessions in the first half of this year has been driven by a combination of factors, but the absolute number of repossessions is still low by historical standards.
“Interest rates are clearly higher than many were expecting, and are set to remain so. And the greater risks inherent in sub-prime lending are resulting in significantly higher levels of repossession in that part of the market compared to mainstream experience. This impact has been underestimated in our past market data, which we have now revised. While the revisions are naturally unwelcome, more accurate market information is important. We will work to further improve data on both mainstream and specialist sectors.
“Overall, the vast majority of mortgage borrowers will continue to cope, even in a market where affordability is stretched. But anyone who thinks they may face difficulties should talk to their lender early to explore their options – lenders see possession as a last resort, but allowing arrears to mount up makes repayment difficulties more difficult to deal with, and is not a sustainable strategy for everyone.”
Reposing to the report, Shelter Scotland director Archie Stoddart said: “These new figures cast a long dark shadow over homeownership, and show ordinary people are staring at financial ruin as they try to keep a roof over their heads.
“Homeowners are being hammered by recent rises in interest rates and some irresponsible lenders handing out mortgages to people who can't afford them. With further rate hikes predicted this year, thousands more homeowners face the misery of repossession and homelessness.”
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Last Updated ( Friday, 03 August 2007 )
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