Rise in home repossessions

The number of people who lost their homes rose by 3 per cent during the third quarter of the year, figures showed today.

A total of 13,987 properties were repossessed by lenders during the three months to the end of September, according to the Financial Services Authority.

But the figure was 6 per cent lower than during the first quarter of the year, as a combination of low interest rates, Government schemes and lender forbearance helped people to stay in their homes.

The FSA also reported a drop in the number of people who had fallen behind with their mortgage for the third quarter in a row.

It said 46,000 people got into arrears of at least 1.5 per cent of their outstanding mortgage during the three months, 10 per cent less than during the second quarter and 30 per cent below the peak reached in the final three months of 2008.

Overall, 395,000 people ended the third quarter in arrears of more than 1.5 per cent, 7,000 fewer than were in this position at the end of June.

People who were in arrears managed to pay an average of 48.5 per cent of the payment that was due during the third quarter, up from around 40.6 per cent in the second half of 2008.

The FSA figures are broadly in line with statistics reported by the Council of Mortgage Lenders last month, which also showed a 3 per cent rise in repossessions during the third quarter to 11,700.

The number of people who were behind with mortgage repayments also dropped to 194,600, although the CML figures only include those who were in arrears of at least 2.5 per cent of their outstanding mortgage.

The difference between the two sets of repossession figures is due to the fact that the FSA data includes all lenders, including those offering second charge mortgages, while the CML only publishes figures on first charge loans advanced by its members.