Repossessions increase over 50%

The Council of Mortgage Lenders (CML) says that the number of UK home repossessions has risen for the first time in seven years, in large part due to five rises in in mortgage interest rates since late in 2003.

Data shows that 4,640 homes were repossessed in the first half of this year, compared with 3,070 repossessions in the last half of 2004. In addition, the Department for Constitutional Affairs (DCA) released numbers showing that more homeowners are being sued for nonpayment of their mortgages.

The DCA says that mortgage repossession applications totaled 28,476 in the second quarter of this year, compared to 18, 675 in the same quarter last year.

The rise in applications is another sign that consumers are saddled with too much debt according to one analyst. An application for repossession, however, does not automatically result in an actual repossession.

Sometimes the lender and the borrower settle terms for repayment and the court does not grant a repossession order in every case.

The CML says that in historical terms repossessions are still very low but that they would probably continue to rise in the short term, although not to the levels that were seen in the early 1990s.