Rise in repossessions

4th August 2006

New figures show that the number of properties repossessed by mortgage lenders rose in the first half of this year.

The statistics – from the Council of Mortgage Lenders – showed that the number of repossessions between January and June 2006 stood at 8,140. That’s the highest since the first half of 2001, and was up from 5,690 in the second half of 2005. However, the rate of increase in long-term mortgage arrears slowed, and shorter-term mortgage arrears fell. This suggests that the outlook is not necessarily one of increasing numbers of repossessions.

The Council of Mortgage Lenders said it believed the rise in repayment problems followed the rise in interest rates between the autumn of 2003 and the summer of 2004, and that these had now largely worked through.

Michael Coogan, who’s the director general of the Council of Mortgage Lenders, said: “Repossessions are up, but remain historically low. Arrears have been stabilising, though the latest interest rate rise may have a modest effect over time.” He added: “We continue to expect repossessions to run at levels of around 15,000 a year between 2006 and 2008, well below their long-run trend.”