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Home repossessions rise by 41% Home repossessions rise by 41%
(10 minutes later)
The number of properties repossessed by mortgage lenders in the UK rose by 41% in the first half of 2008, to 18,900, the Council of Mortgage Lenders says.The number of properties repossessed by mortgage lenders in the UK rose by 41% in the first half of 2008, to 18,900, the Council of Mortgage Lenders says.
The sharp rise had been widely expected as an economic slowdown makes it harder for some homeowners to repay mortgages.The sharp rise had been widely expected as an economic slowdown makes it harder for some homeowners to repay mortgages.
Repossessions have been rising since the second half of 2004 but have now begun to accelerate.Repossessions have been rising since the second half of 2004 but have now begun to accelerate.
The number of mortgages in arrears has also risen, up by 20% in the first half of the year, to 155,600.The number of mortgages in arrears has also risen, up by 20% in the first half of the year, to 155,600.
'Extremely small''Extremely small'
The Council of Mortgage Lenders (CML) had previously predicted that repossessions this year would rise to 45,000.The Council of Mortgage Lenders (CML) had previously predicted that repossessions this year would rise to 45,000.
Its director general Michael Coogan said the latest figures were no surprise, and would get worse.Its director general Michael Coogan said the latest figures were no surprise, and would get worse.
"While both have increased from their low base as expected, the overwhelming majority of the UK's borrowers continue to pay their mortgages in full every month, and will continue to do so," he said."While both have increased from their low base as expected, the overwhelming majority of the UK's borrowers continue to pay their mortgages in full every month, and will continue to do so," he said.
"The CML is maintaining its forecast of 45,000 total possessions and 170,000 mortgages in arrears of more than three months by the end of the year."The CML is maintaining its forecast of 45,000 total possessions and 170,000 mortgages in arrears of more than three months by the end of the year.
"These numbers remain extremely small when seen in the context of the 11.74 million mortgages in the UK," he added."These numbers remain extremely small when seen in the context of the 11.74 million mortgages in the UK," he added.
Compared to the first half of 2007, the latest figures represent a rise of 48%.Compared to the first half of 2007, the latest figures represent a rise of 48%.
The CML argues that sub-prime borrowers - those with poor or non-existent credit histories - have been the ones most affected by repossessions.The CML argues that sub-prime borrowers - those with poor or non-existent credit histories - have been the ones most affected by repossessions.
"In general terms, while arrears and possessions rates have risen across the industry, the impact of the credit crunch has hit the adverse credit sector harder than most of the mainstream market, which continues to perform well," it said."In general terms, while arrears and possessions rates have risen across the industry, the impact of the credit crunch has hit the adverse credit sector harder than most of the mainstream market, which continues to perform well," it said.
The organisation pointed out that 0.16% of all mortgages had been taken back by lenders in the first half of the year, up from 0.11% throughout the whole of 2007. Fair treatment
And it said this rate was similar to that of the late 1990s, and was less than half the rate seen in the early 1990s. The organisation pointed out that 0.16% of all mortgages had been taken back by lenders in the first half of the year, up from 0.11% throughout the while of 2007.
It said this rate was similar to that of the late 1990s, and was less than half the rate seen in the early 1990s.
Earlier this week the Financial Services Authority (FSA), warned lenders to treat their customers "fairly" if they were running into financial difficulty.
It said that repossession should be the last resort if someone was having trouble repaying their home loan.
However, one of the most aggressive repossessors has been the Northern Rock bank, now state owned.
It revealed this week that its own repossessions had risen by 67% in the past year, from 2,215 to 3,710.