Home repossessions reach highest level since 1996

Home repossessions rose to their highest level since 1996 last year, according to data released on Friday.
There were 40,000 repossessions in 2008, up from 25,900 the previous year.
The total number of repossessions was equivalent to 0.34 per cent of all outstanding mortgages, the highest proportion since 1996, at the tail end of the last housing bust, when the figure was 0.4 per cent.
The 1990s housing crash saw repossessions rise to a peak of 0.77 per cent of outstanding mortgages in 1991.
The Council of Mortgage Lenders, which compiles the data, said that there was a sharp rise in cases where borrowers handed back their keys or abandoned their properties.
However, although last year saw a sharp rise in repossessions, the final quarter of the year showed a 6 per cent decline after rises of 18 per cent and 11 per cent over the two preceding quarters. But there were still 10,400 homes reposssessed in the quarter, sharply up from the 6,900 level of the same quarter a year earlier.
The CML also said that the annual figure of 40,000 repossessions was 5,000 lower than it had expected.
But it maintained its forecast that 75,000 homes would be repossessed this year – which would be close to the highest level on record.
There was also a marked increase in the proportion of homeowners in arrears on their mortgages by more than three months – signalling that yet more people are set to lose their homes.
In the final quarter of 2008 there was a 31 per cent jump in the number of properties more than 3 months behind on mortgage payments. That left the proportion behind on payments at the end of the year at 1.88 per cent of outstanding mortgages, up from 1.08 per cent in 2007.
Homeowners severely behind on their mortgages, measured by the those more than 12 months behind on payments, jumped by 92 per cent over the year, the biggest increase since 1991.
The CML said that efforts by lenders, as well as various government programmes to assist homeowners struggling with their debts, were offering some relief.
“Despite the upward pressure on mortgage arrears and repossessions arising from the problems in the economy and rising unemployment, both lenders and government are continuing to find more ways to help more people stay in their homes,” the CML said.