Friday, August 03, 2007

Home repossessions rise by a third

The number of people whose homes were repossessed surged by 30% during the first half of the year as homeowners struggled with rising interest rates, figures show.
The Council of Mortgage Lenders said 14,000 homes in the UK were repossessed during the six months to the end of June, 18% more than during the previous six months and 30% above the same period of 2006.
The group blamed the rise in repossessions on the recent increase in levels of lending to borrowers with a poor credit history in the sub-prime sector.
It warned that the higher risk involved in lending to people who would be turned down by mainstream lenders meant arrears were more likely to translate into repossessions, and this was likely to happen at an earlier stage.
But it added that despite the sharp rise in repossessions, numbers were still low by historical standards.
David Stubbs, senior economist at the Royal Institution of Chartered Surveyors, said the level of repossessions were at their highest since the first half of 1999, with around 77 homes being repossessed every day.
The CML also said 125,100 homeowners had mortgage arrears of three months or more, 4% higher than during the six months to the end of December, but 3% lower than for the first half of 2006.
Adam Sampson, chief executive of housing charity Shelter, said: "Homeowners are being hammered by recent rises in interest rates and some irresponsible lenders handing out mortgages to people who can't afford them.
"With further rate hikes predicted this year, thousands more homeowners face the misery of repossession and homelessness."
The CML figures come as the Government's Insolvency Service reported a surprise drop in the number of people who went insolvent during the second quarter of the year.
The 'Brown Bounce' is sending us all straight to hell!

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