Increase In Number Of Repossessions
As the credit crunch really began to take hold of the UK economy at the beginning of this year, the Council of Mortgage Lenders (CML) issued a stark warning that up to 45,000 homes were likely to be repossessed through the course of 2008 due to borrowers failing to keep up with the repayments on their mortgages and home loans.
From the data which has been collected so far this year, the CML have now said that they are maintaining their previous prediction and also that the level of repossessions on properties has now reached the same level as it was in the late nineties. The CML have also predicted that 170,000 borrowers are likely to be in an arrears situation with their home loans by the end of the year.
During the first six months of this year, there have been 18,900 properties repossessed and this figure is likely to increase as many individuals are coming to the end of an initial fixed rate cheap loan, with little chance of being able to find a re-mortgage deal with a similar cost to their previous home loan.
In addition to this, there were 155,600 mortgages and home loans with more than three months arrears by the end of the first half of the year. The total number of repossessions for 2007 was 26,200 and the number of loans with three months or more arrears was 129,600.
The CML have said that these figures need to be taken in context with the whole of the UK mortgage market. There are 11.74 million mortgage loans currently and the figures above represent 0.16 per cent of these for repossession and 1.33 per cent of loans in arrears.
Michael Coogan of the CML said “The good news is that most people are coping well and continuing to pay their mortgages in full, despite the higher costs of food and fuel and the higher mortgage rates now prevailing in the market for those coming off cheaper original deals, but it is inevitable that more borrowers’ coping strategies will come under pressure in current conditions than in the unusually benign years of the last decade.”
