Borrowers warned as recession sends 'lost homes' to 14-year high

Published on Thursday 11 February 2010 21:03

THE number of people who lost their home soared to a 14-year high during 2009, as the recession continued to take its toll, figures showed yesterday.

About 46,000 people had their property repossessed during the year, the highest level since 1995 and 15 per cent more than in 2008, according to the Council of Mortgage Lenders.

But the figure was well down on the group's original forecast that 75,000 people would lose their home during the year, although this was revised down twice to 48,000 when the predicted flood of repossessions failed to materialise.

A further 188,300 homeowners were also in arrears of at least 2.5 per cent of their mortgage debt at the end of last year, although this was 3 per cent lower than during the third quarter.

A combination of low interest rates, a more tolerant approach by lenders and the introduction of government schemes to help people who are struggling to keep up with their mortgage has helped to keep repossession figures lower than forecast.

But the CML warned that the economy was not "out of the woods" yet, and said 2010 was likely to be a challenging year for many homeowners.

It has previously predicted that 53,000 homes will be repossessed this year, with a further 205,000 people ending 2010 in arrears.

But it said today these forecasts may be "a little pessimistic", due to unemployment not rising by as much as had been expected, and low interest rates.

Michael Coogan, the CML's director general, said: "We are not out of the woods yet – 2010 will still be a challenging year for many borrowers."