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19,000 homes are repossessed in past six months
Jonathan Prynn, Consumer Affairs Editor08.08.08
The number of homes repossessed has soared more than 40 per cent this year to its highest level since the mid-Nineties.
Owners of almost 19,000 houses and flats had to hand back the keys in the first six months of this year because they could no longer afford the monthly payments, according to figures from the Council of Mortgage Lenders. Last year, 13,400 homes were repossessed by banks and building societies in the same period.
The CML is forecasting a total of 45,000 repossessions for the year as a whole, the worst level since 1995.
The peak year was 1991, when 75,500 homes were seized by banks and building societies, but in the boom years of the late Nineties and early Noughties they fell sharply, bottoming out at just 8,500 in 2003 and 2004.
The gloomy figures come three days after the City watchdog the Financial Services Authority warned that banks were too hasty in forcing people out of their homes.
The FSA said banks were often acting "without reference to the borrowers' circumstances".
In another telling indicator of the way in which soaring bills are stretching household finances, the number of households with arrears of three months or more has risen to 155,600, up from 120,800 last year. That means that around one home owner in 75 is now at risk of repossession because mortgage payments have stopped.
Michael Coogan, director general of the CML, called on the Government to create a state funded "safety net" for vulnerable borrowers and denied that lenders were too trigger happy.
He said: "No-one wants to see people lose their homes, and repossession typically leads to a loss for the lender as well.
The focus of lenders' arrears management policies today is on seeking realistic alternatives that balance the interests of customer and lender. Anyone who thinks that they may be heading towards financial problems should contact their lender to discuss their options - the earlier the better."
But Sue Edwards of the charity Citizens Advice said lenders were still being too aggressive. "In too many cases lenders are still not doing everything they can to help borrowers in trouble, piling on extra charges, not negotiating with borrowers to come to a workable solution over repayment arrangements and using court action as a first rather than a last resort."
One of the most aggressive repossessors has been the now state-owned Northern Rock bank, which revealed this week that its own repossessions had risen by 67 per cent in the past year, from 2,215 to 3,710.
Reader views (6)
Should the Government who so willingly bailed out Banks with tax payers money not insist that the repossed houses/flats etc be sold at the repossed price obviously making the new purchaser resposible for the EXPENSES relevant condition etc of the said property, rather than allowing the Banks and Estate Agents making money from DISTRESSED PEOPLE. Is it not the same or similar to the scenario of the lending of shares to the brokers to sell who are partly to blame for our economic crush?
Banks have NO problem in repossessing properties as long as they are allowed to make money with their resale.
Plinius
- Plinius, london uk
My Grandfather always used to tell us "Always cut your cloak according to your cloth". So true. If you can't afford the house don't buy it! The government are not a charity so why should they bail them out? It is pure greed on their parts.
- Charlie, London
Let's put this in perspective - 19,000 divided by 6 Months is a little over 3,000 per month which is probably a little above the average.
There are 11 Million mortgages/home-owners in the UK. This amount is equatable to all those people that overstretched themselves.
- Big Andy, London
Unless something drastic is done quickly then the numbers of repossessions WILL grow exponentially to 100,000 by the end of the NEXT 6 months!
Whilst the government is ALL too eager to help out banks that get in financial difficulty e.g. Northern Rock, isn't it about time that taxpayer's money is actually used to help taxpayers that are in difficulty?
After all, it's not like ANY of the directors or senior management at Northern Rock were going to lose their homes if Northern Rock went bust, was it?
- Fraser, Telford Park
It's awful. Best job now is being a bailiff.
- Hellsangelfreemason, Peckham, UK
I got in touch with our mortgage company and asked for help before we got into a mess. It took two letters for them to reply, and when they did reply the simply said we cannot help you, contact the citizens advice bureau, although in my letter to them I told them that the citizens advice has already told me to contact my mortgage company. So no, they didn't help, they haven't even read my letter properly by the sounds of it from their reply. Now we are praying for a miracle to keep our home. Remortgaging would be the answer, but as my husband lost his job for a while, we got into bad credit through no fault of our own, and now credit is one thing we are not being given, although it is obvious if we were given it, we would keep our home and bring our payments down. This country has gone totally insane!
- Jennifer Ringstead, Ilantwit Major, Vale of Glam
