Home repossessions surge to 12 year high
The number of people who lost their homes soared by more than 50% during 2008 to hit a 12-year high, figures showed today.
A total of 40,000 properties were repossessed by lenders during the year, up from 25,900 in 2007, the Council of Mortgage Lenders said.
Repossession levels are expected to soar further this year as the credit crunch and deteriorating economy continue to bite, with the group predicting 75,000 people will lose their homes in 2009.
But there was a slight drop in the number of properties taken over by lenders in the final quarter of 2008, with 10,400 people losing their homes during the period, compared with 11,100 in the previous quarter.
However, the figure was still well up on the final quarter of 2007, when 6,900 homes were repossessed.
The CML said the total number of repossessions for 2008 had come in 11% below its forecast of 45,000.
It said for this to happen despite the worsening economy and rising unemployment, demonstrated that mortgage lenders were making "strenuous efforts" to ensure repossession was a last resort.
But the group said there had been a sharp increase in the number of cases where borrowers were handing back keys to their lenders or abandoning their properties.
It urged people not to do this, warning they would still be liable for any outstanding debt once their home was sold.
One in 10 homes repossessed during 2008 were buy-to-let properties, in line with the proportion of mortgages that are buy-to-let loans.
Landlords have been hit particularly hard by the credit crunch, with many lenders pulling out of the buy-to-let market altogether, while others are demanding bigger deposits and charging higher rates.
The CML said there had also been a number of properties repossessed which had been used in mortgage frauds.
By the end of 2008, around 182,600 mortgages, or 1.57% of the total, were in arrears of 2.5% or more of their outstanding balance, up from 1.29% of mortgages being in arrears of this level in the third quarter and 1.08% at the end of 2007.
Overall, repossessions accounted for one in every 290 mortgages in 2008, while one in every 64 mortgages was in arrears of 2.5% or more by the end of the year.
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