Home repossessions soared by 30 per cent in the first half of the year and analysts warn the figures could continue to rise.
The 14,000 homes repossessed in the first six months is the highest level since 1999 and is equivalent to 77 homes a day, says the Council of Mortgage Lenders. Mortgages in arrears at the end of June rose to 125,100, up by 4 per cent from December but down by 3 per cent from June last year.
The majority of cases – 71,800 – involved arrears of three to six months, 38,300 had arrears of six to12 months and 15,000 more than 12 months.
The CML says the sharp rise in repossessions compared with arrears over the past two years is likely to be a result of an increasing amount of sub-prime lending within the overall market. Bank base rate has risen five times in less than a year to 5.75 per cent.
Mform marketing and business development director Francis Ghiloni says with 1,500 households coming off fixed-rate deals every day, these figures could be the tip of the iceberg. He says: “Given this, we believe that the number of repossessions is set to rise.”
The CML says it has substantially revised its repossession figures and now believes there were 22,700 repossessions last year, a third more than its original estimate of 17,000.
Intermediary Mortgage Lenders’ Association executive director Peter Williams says the figures are still exceedingly low by historic standards.
He says: “Any increase is unwelcome by both lenders and borrowers but we do need to keep this in perspective.”