Reposessions rising sharply

30 November -0001

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According to a the Council of Mortgage Lenders, the number of homes being reposessed has risen for the first time in seven years.

During the first six months of 2005, there were 4640 homes reposessed, compared with 3070 in the previous six months. It's thought that the rise in reposessions are due to five siccessive interest rate hikes since 2003

At the same time, it's emerged that more homeowners are being taken to court for mortgage arrears.

Sometimes the courts choose not to grant an order or the lender comes to an agreement with the borrower over the outstanding mortgage debt.

The number of reposession orders applied for rose by almost 10'000 in the same 6 months - from 18'675 to 28'476.

However, reposession does not automatically follow from an order being granted, but the sharp rise in both reposessions and reposession orders adds to growing concern that homeowners are struggling with debt.

Interest payments as a proportion of household income were still well below the levels seen in the early 1990s, when repossessions were at a record high, a government spokesman said.

The CML added that repossessions were "extremely low" by historical standards, and that the UK housing market was a long way from a "re-run of the early 1990s."

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