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Repossessions rise again in 2006 Repossessions rise again in 2006
(40 minutes later)
The number of properties repossessed by lenders has continued to rise sharply, up 9% in the second half of 2006.The number of properties repossessed by lenders has continued to rise sharply, up 9% in the second half of 2006.
The Council of Mortgage Lenders (CML) says 8,860 homes were taken back, up from 8,140 in the first six months of the year.The Council of Mortgage Lenders (CML) says 8,860 homes were taken back, up from 8,140 in the first six months of the year.
It means that more properties - 17,000 - were repossessed in 2006 than in any year since 2000.It means that more properties - 17,000 - were repossessed in 2006 than in any year since 2000.
Although the figures have nearly tripled in the past two years they are only 0.15% of all current home loans.Although the figures have nearly tripled in the past two years they are only 0.15% of all current home loans.
'Prospects worsen''Prospects worsen'
"Repossessions are likely to creep up from around 17,000 last year to 19,000 this year and 20,000 next year - higher than the low of 6,030 in 2004, but still only around a quarter of the 1991 peak of 75,540," said the CML's director general Michael Coogan."Repossessions are likely to creep up from around 17,000 last year to 19,000 this year and 20,000 next year - higher than the low of 6,030 in 2004, but still only around a quarter of the 1991 peak of 75,540," said the CML's director general Michael Coogan.
"This reflects a slight worsening in prospects as a result of higher interest rate expectations since the previous forecast," he said."This reflects a slight worsening in prospects as a result of higher interest rate expectations since the previous forecast," he said.
The Royal Institution of Chartered Surveyors has also warned that repossessions will rise further if interest rates keep going up. The Royal Institution of Chartered Surveyors has also warned that repossessions will rise.
David Stubbs, senior economist at the RICS said: "The RICS expects repossessions to rise further as the impact of the recent increases in interest rates takes its toll and homeowners struggle to repay their mortgage loans."
But another indicator of borrowers in difficulty - the level of mortgage arrears - showed a drop last year.But another indicator of borrowers in difficulty - the level of mortgage arrears - showed a drop last year.
The CML says that the number of mortgages which were three-to-six months in arrears dropped from 62,920 in 2005 to 59,100 in 2006.The CML says that the number of mortgages which were three-to-six months in arrears dropped from 62,920 in 2005 to 59,100 in 2006.
The number which were six-to-12 months in arrears also fell, from 34,630 to 31,120.The number which were six-to-12 months in arrears also fell, from 34,630 to 31,120.
And those more than a year behind fell too - down from 14,380 in 2005 to 13,720 last year.And those more than a year behind fell too - down from 14,380 in 2005 to 13,720 last year.
With more than 11.7 million mortgages in existence last year, those more than three months in arrears represented less than 1% of the total.With more than 11.7 million mortgages in existence last year, those more than three months in arrears represented less than 1% of the total.
Despite this, the CML predicts that arrears will now build up again as higher interest rates feed through.Despite this, the CML predicts that arrears will now build up again as higher interest rates feed through.
"The strong likelihood is that the vast majority of these short-term payment problems will be successfully managed by borrowers and lenders without becoming long term arrears cases," it claimed."The strong likelihood is that the vast majority of these short-term payment problems will be successfully managed by borrowers and lenders without becoming long term arrears cases," it claimed.
The current level of repossessions is a far cry from the days of the early 1990s recession and property crash.The current level of repossessions is a far cry from the days of the early 1990s recession and property crash.
Between 1990 and 1993, 247,000 home owners lost their homes as house prices slumped and unemployment rose to record levels.Between 1990 and 1993, 247,000 home owners lost their homes as house prices slumped and unemployment rose to record levels.