Repossessions rise more than 20 per cent to eight-year high

THE number of people whose homes were repossessed in the UK jumped by more than 20 per cent in 2007 to an eight-year high.

A total of 27,100 homes were taken back by lenders after their owners failed to keep up with mortgage repayments, the Council of Mortgage Lenders said today.

But the group said the figure, the equivalent of 0.23% of all mortgages, was 10 per cent lower than it had previously estimated, and it was also well down on the high of 75,540 repossessions reached during the house price crash in 1991.

But Ron Smith, chief executive of the Edinburgh Solicitors Property Centre, said he expected the Capital would fare better than the national figures.

He said: "We have no evidence of increased repossession in Edinburgh. In terms of price and value in the city, we are not as exposed in terms of people over-expending themselves for mortgages. In fact, growth in property prices in Edinburgh has been steady."

He said that Scotland as a whole was seeing a steadiness not apparent in the English market.

Mr Smith said that the UK figures were an indicator of an overstretching of the mortgage market.

He said: "People have been taking out mortgages greater than they can afford. They are in turn finding it difficult to maintain payments. On top of this, we are all paying more to live."

However, he added that the property market as a whole was seeing less turbulence than had been expected.

The latest figures from the Council of Mortgage Lenders show that overall, fewer than one in 400 mortgages led to a home being repossessed during 2007 – that's less than half the level seen during the first half of the 1990s.

At the same time, the predicted increase in repossessions during the course of 2007 failed to materialise, with just 13,500 homes taken over by lenders during the final six months of the year, compared with 13,600 during the first half.

The CML said although repossessions had risen from their recent low of below 10,000 a year in 2003 and 2004, they continued to represent a tiny fraction of all home loans.

However, James Jopling, head of campaigns for Shelter Scotland, has blamed lenders for the repossessions crisis.

He said: "These new figures clearly show Britain is moving step by step towards the dark days of the 1990s housing recession. Far too many hard-working families are now struggling to pay their mortgages and stay afloat.

"Lenders must take more responsibility and work with the Scottish and UK Governments to urgently set up a free, confidential advice service to help the growing numbers of homeowners hit by mortgage arrears."

The CML said it was difficult to forecast what the likely level of arrears and repossessions would be in 2008.