House Repossessions in the UK jump 92pc

Repossessions almost doubled in the three months to September last year, according to the City watchdog.

Figures published today by the Financial Services Authority (FSA) show 13,161 homes were repossessed by mortgage lenders in the third quarter of last year. It represents a 92 per cent jump on the same period in 2007, when fewer than 7,000 householders lost their homes.

The FSA also warned of a sharp rise in the number of homeowners who have missed at least one mortgage repayment. It said 340,000 borrowers were in arrears at the end of September, a 24 per cent rise on the same period in 2007 and a ten per cent rise on the previous quarter of last year.

The proportion of total mortgages in arrears rose to 2.92 per cent, up 0.79 percentage points on the third quarter in 2007.

The figures, which were compiled by the FSA using data from 300 mortgage lenders, paint a worsening picture of the UK housing market.

Adam Sampson, of Shelter, the housing charity, said: "These figures show just how difficult and miserable 2009 will be for British homeowners. We are without question engulfed by a housing crisis worse than the 1990s crash."

Meanwhile, the Department for Communities and Local Government released figures today that showed a jump in families on council housing waiting lists. The numbers waiting rose to almost 1.8 million in April last year, up from 1.67 million the year before.

The total number of council homes fell to 1.8 million, compared with 3.18 million in 1999.

Mr Sampson added: "It's no surprise that as repossessions soar so does the council house waiting list. This Government has failed to build anywhere near the number of social homes Britain desperately needs."

The Council of Mortgage Lenders has predicted that 500,000 homeowners will be at least three months in arrears by the end of 2009 as the economy slides into a deep recession and unemployment soars to 8 per cent of the working population. It estimates that 45,000 homes were repossessed in 2008 and predicts this will jump to 75,000 in 2009.

The Government has committed an extra £200 million to expand a range of schemes aimed at tackling the sharp rise in repossessions. But questions remain over the details of the Homeowners Mortgage Support Scheme, due to launch in April.

It is designed to support households who suffered from redundancy or a drop in earnings, allowing them to defer the interest payments on their mortgage for up to two years. Lenders and the Government remain in discussion over who will bear the costs for the scheme.

The FSA figures published today also showed a sharp fall in the number of new loans to borrowers with impaired credit ratings falling from 3.5 per cent in the third quarter of 2007 to 1.5 per cent in the same period last year.

Beccy-Boden Wilks, of National Debtline, the debt charity, said: "Lenders are tightening up and borrowers with poor credit records will find it even harder to get credit. Individuals often have multi-priority debts now, from mortgage arrears to credit card debt and missed energy payments."

In response to the news that repossessions rise, the Local Government Association has warned that five million people could be waiting for a council house by 2010.

Chairman of the Local Government Association Environment Board, Cllr Paul Bettison, said:
“With the banks overstretching their credit facilities it could well be the case that in the coming months councils will have to help pick up the pieces as people end up on social housing waiting lists. Even when the economic good times were rolling, councils saw ever increased pressure on their social housing stock. An average of 90,000 households join the waiting list ever year and we expect this to rise.

“Councils want to provide decent homes quickly for those who cannot afford to rent in the private sector or buy their first home. Councils have been hamstrung by the lack of freedom to borrow off council assets to invest in building or buying new homes for those who need them most. Town halls also need more flexibility to use existing housing stock.

“Social housing has to be a top priority because the harsh reality is that fewer people are getting on to the housing ladder.�

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