Home repossessions at 12-year high

A total of 18,900 homes were taken back by lenders after their owners failed to keep up with mortgage repayments - the equivalent of 0.16% of all mortgages, the Council of Mortgage Lenders said.

The CML forecasts that 45,000 homes will be repossessed by the end of the year as cash-strapped borrowers struggle to repay their mortgages.

The Financial Services Authority fired a warning shot to lenders earlier this week after finding that specialist mortgage firms were "too ready" to take court action against borrowers.

The half-year data compares with 120,800 homes repossessed at the end of June 2007 and 129,600 at the end of December. The CML said the rate of repossession, at 0.16%, was now the highest seen for 10 years.

But it stressed this was still low in the context of the entire mortgage market and less than half that experienced amid the housing market crash of the early 1990s.

The figures also reveal that the number of mortgages three months or more in arrears has risen by 29% year on year to 155,600 at the end of the first half. This is equivalent to 1.33% of all home loans, although the number of mortgages more than six months in arrears was 0.58% of all loans.

Housing charity Shelter said the figures were "shocking", adding that hard-pressed homeowners are also now only given state help after nine months, too late to prevent many from losing their homes, it claimed.

Chief executive Adam Sampson said: "Behind these figures are thousands of families facing sleepless nights worrying about how to make their next mortgage payment, and many thousands more will be waking up to the frightening reality of repossession.

"Government urgently needs to step in to prevent thousands more families from losing their homes and provide the significant financial support troubled homeowners need to keep a roof over their head."