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Finance

Growing repossessions 'cause for concern'

03/08/2007

The number of houses taken into possession because of mortgages falling into arrears jumped by 30 per cent in the first half of 2007.

Figures from the Council of Mortgage Lenders (CML) show that there were 14,000 properties taken into possession in the opening six months of the year, representing a 30 per cent increase on statistics from the same period in 2006.

The number of mortgages in arrears jumped by four per cent in the first half of 2007 to 125,000.

But only one per cent of total mortgages were in arrears, leading led CML director general Michael Coogan to point out that the "vast majority" would continue to cope.

He said high interest rates and greater risks in sub-prime lending were behind the "sharp rise".

"Anyone who thinks they may face difficulties should talk to their lender early to explore their options - lenders see possession as a last resort, but allowing arrears to mount up makes repayment difficulties more difficult to deal with, and is not a sustainable strategy for everyone," he said.

Citizens Advice policy officer Peter Tutton said his organisation was reporting rising numbers of people falling behind with mortgage payments.

Lenders were resorting to possessions more readily in the current environment, he added.

"We want to see lenders making genuine efforts to reach agreement with borrowers on reasonable and affordable arrears repayment before taking court action," he said.

"We would advise borrowers to speak to their lenders if they are having difficulties and to think very carefully about whether they can afford the amount they wish to borrow."

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