Repossessions hit 16-year high as lenders 'turn to courts first'

The number of home repossessions in England and Wales leapt by 17 per cent during the first three months of 2008, providing further evidence of the depth of the crisis in Britain's housing market.

According to new figures from the Ministry of Justice, the number of mortgage possession claims made by lenders hit 16-year highs of 38,688 during the first quarter – more than 3,000 higher than the same period in 2007.

Meanwhile, the number of possession orders signed off by the English and Welsh courts rose above 27,530 during the period, a rise of about 4,000 since the start of last year.

Home repossession orders are now at their highest levels since the housing market crash of the early 1990s, and are expected to continue rising during the rest of 2008, as the credit crunch and a slowing economy put the squeeze on home owners. Although not all court orders result in repossession – with about half being suspended – more than 30,000 families are likely to be evicted from their homes this year.

Citizens Advice, the consumer charity and advice agency, criticised Britain's banks and building societies for turning to the courts too soon, claiming it would be better for both lenders and borrowers if mortgage providers made a greater effort to put affordable repayment schedules in place.

Sue Edwards, the head of consumer policy at Citizens Advice, said: "We have seen a very sharp rise in the number of people coming to us with mortgage arrears, and evidence that in too many cases lenders are using court action as a first rather than a last resort.

"We want to see all lenders doing everything in their power to avoid things getting to this stage. This means treating borrowers in arrears fairly and sympathetically, and being willing to negotiate with borrowers in trouble."

Although the Government announced a new £9m funding package yesterday to help those in trouble with their mortgages – and committed to holding talks with the mortgage industry to discuss what more can be done – Vince Cable, the Liberal Democrat Treasury spokesman, said the measures were not enough.

"The Prime Minister's pride and stubbornness has made him completely unwilling to recognise the dangers in the housing market," he said. "It is overstretched households that will pay the price. This Government must stop having vague discussions with mortgage lenders and instead clearly lay out the procedures which must be followed before a property can be repossessed. Repossession must only ever be a last resort. Lenders must seek all possible alternatives before taking such action."

Grant Shapps, the Conservative housing spokesman, added: "While we welcome the Government belatedly getting on board [with its extra support for home owners], it's too little, too late and does nothing to help the 27,000 families who have already experienced repossession."

The Council of Mortgage Lenders, which represents the majority of Britain's mortgage providers, insisted repossessions were still only being used as a last resort.

Michael Coogan, its director general, said: "No one wants to see repossessions rise. But risk is a part of life and, for some households, circumstances change and they cannot get back on their feet. However, most people who suffer payment difficulties can get out of trouble by taking good advice, prioritising their debts, and communicating with their lender early.

"Lenders are committed to keeping the number of repossessions as low as possible, even in more challenging economic conditions."

Although a growing number of home owners have struggled when renegotiating their mortgages recently, David Hollingworth, of London & Country, the mortgage broker, said most should be able to get the finance they need, albeit at slightly higher interest rates than they might have been paying.

Discover more property articles at Homes and Property
Life and Style
A monstrous idea? Body transplants might no longer be science fiction
Science An Italian neurosurgeon believes so - and it's not quite as implausible as it sounds, says Steve Connor
Demba Ba (right) celebrates after Besiktas win on penalties
footballThere was no happy return to the Ataturk Stadium, where the Reds famously won Champions League
Arts and Entertainment
Natural beauty: Aidan Turner stars in the new series of Poldark
arts + ents
Mia Freedman, editorial director of the Mamamia website, reads out a tweet she was sent.
arts + ents
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Bookkeeper

£23000 - £26000 per annum: Recruitment Genius: This small, friendly, proactive...

Recruitment Genius: Photographic Event Crew

£14500 - £22800 per annum: Recruitment Genius: This is a fantastic opportunity...

Recruitment Genius: Software Developers - .NET / ASP.NET / WebAPI / JavaScript

Negotiable: Recruitment Genius: A Software Developer is required to join a lea...

Austen Lloyd: Corporate Tax Solicitor - City

Excellent Salary: Austen Lloyd: A first rate opportunity to join a top ranking...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower