Thousands more set to lose their homes

Sean O'Grady@_seanogrady
Wednesday 18 March 2009 01:00

The pain suffered by thousands of families as the eco-nomy slumps was highlighted yesterday by the latest figures on home repossessions and arrears. The number of repossessed homes soared by 68 per cent last year as the recession left many people struggling to pay their mortgage, according to the Financial Services Authority. A total of 46,750 properties were repossessed by lenders during the year, up from 27,900 in 2007, the FSA reported.

There was also a steep rise in the number of people who fell behind with mortgage repayments during the final quarter of the year. About 68,000 individuals found themselves behind in their loan repayments in the period, a 13 per cent jump compared with the previous quarter, which had seen a 10 per cent rise.

The fall in house prices – about 20 per cent from the autumn 2007 peak – will exacerbate problems as many of those behind will find themselves in negative equity and at risk of bankruptcy. The Department for Communities said yesterday that the annual fall in house prices widened again in January, to 11.5 per cent.

By the end of last year, 377,000 homeowners were behind with their mortgage, nearly a third more than at the end of 2007. But there was a slight fall in the number of homes that were repossessed during the final quarter of 2008. A total of 13,028 properties were taken over by lenders then, 436 fewer than during the previous three months.

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