Repossession on the rise

New figures for the third quarter of 2008 say that the number of cases of households in arrears over mortgage repayments rose by 8% on June figures.

The number or repossessions that took place between June and September was 11,300, 12% higher than the 10,100 in the second quarter. The CML continues to expect the total number of repossessions this year to be around 45,000, as forecast in October 2007.

Repayments on buy-to-let mortgages has worsened more rapidly than the market as a whole, according to the CML. Reasons include falling rents and an over-supply of rental property in some areas, resulting in some landlords being unable to let their property or achieve high enough rents to support their borrowing commitments. Fraud is also likely to have been a contributory factor.

CML director general Michael Coogan said: ‘The government has taken some helpful steps towards targeted support for some of the most vulnerable households, but with a worsening economy now needs to make it a priority to go further.

‘Increased help with housing costs is needed for a wider range of borrowers facing unforeseen repayment difficulties where there would otherwise be little prospect of early improvement.

The CML hopes that lenders seek to avoid repossession wherever other solutions can be found. ‘We and our members are continuing to look at every possible way of minimising repossessions, consistent with considerations of the borrower's financial prospects.’