140 families a day losing their homes in recession

HOME repossessions soared by 50 per cent during the first quarter of the year – but they are no longer expected to reach the near-record levels previously forecast for 2009.

About 12,800 people across the UK lost their homes after failing to keep up with their mortgages during the three months to the end of March, up from 8,500 a year earlier and from 10,400 in the previous quarter, the Council of Mortgage Lenders (CML) said.

Within this total 1,700 landlords had their properties repossessed, nearly double the 900 who lost them during the same period of 2008.

However, despite the steep rise in repossessions, the CML said its forecast that the number of people losing their homes would soar from 40,000 in 2008 to 75,000 this year now looked pessimistic, and it expected to revise that figure down.

The revision will come despite the group also reporting a sharp jump in the level of people who have fallen behind with their mortgage repayments. The number of homeowners with arrears of more than 2.5 per cent of their mortgage balance soared by 62 per cent year-on-year during the first quarter to 205,300 – 12 per cent more than during the previous three months.

The CML said that, although arrears levels were continuing to increase, lenders were committed to working with borrowers who had got into financial difficulties.

Michael Coogan, director general of the CML, said: "It is quite clear that the number of arrears cases is rising far more markedly than the number of repossessions.

"Lenders are demonstrably increasing the forbearance they are offering, while many struggling borrowers have gained some breathing space through lower interest rates feeding through to lower monthly payments."

The government has also launched a range of initiatives in the face of rising unemployment to help people who cannot keep up with their mortgages to stay in their home.

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, said the latest figures provided evidence that those government policies were working.

"As these schemes begin to have a meaningful impact over the coming months, the likelihood is that the number of claims issued will continue to weaken," he said.

He forecast repossessions could be as low as 50,000 this year, some way below the highs reached during the early 1990s.

But other economists warned that sharp rises in unemployment were likely to push the number of people struggling to keep up with their mortgages much higher in the months ahead.

And Sam Younger, chief executive of housing charity Shelter, said: "These figures paint a very depressing picture of thousands of homeowners across the country struggling to keep up with their mortgage repayments, with many more losing the roof over their head."