The Council of Mortgage Lenders (CML) confirm what many analysts predicted earlier in the year, that more and more people would lose their homes as borrowers simply could not afford to repay their mortgages. As a matter of fact, compared to the first half of last year, repossessions are up by almost 50%!
18,900 homes were repossessed by lenders as opposed to 12,800 in the same period last year. The last time the UK experienced a huge increase in repossession was in the late 1990s however, despite these alarming figures recently the rate at which lenders are taking possession of properties is about half that of the 1990s.
Figures produced by the Council also mention the number of households falling into 3 months arrears or more which have also increased from last year. The first half of 2007 reported approximately 120,800 homeowners unable to make repayments for 3 months or more whilst the first half of 2008 see that number climb to 155,600.
Even before these reports became public homeowners expressed worry about being able to cope with inflation as well as rising costs in food, petrol, and gas and electricity.
CML’s director general, Michael Coogan says, “The number of people facing difficulty needs to be kept in perspective. The good news is that most people are coping well and continuing to pay their mortgages in full, despite the higher costs of food and fuel and the higher mortgage rates now prevailing in the market for those coming off cheaper original deals.”
Although these numbers are alarming, CML remains optimistic about its original forecast of seeing 45,000 total repossessions and 170,000 mortgages fall into arrears (by 3 months or more) by the end of 2008. Will 2009 be better or worse?
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