A foot in the door

Home repossessions are climbing to levels not seen since the property crash of the early Nineties. Sarah Duguid joined the bailiffs at work - and met the unlucky debtors whose houses are no longer their homes

But inside this two-bedroom flat in a luxury riverside development in Cardiff Bay - so new that the smell of fresh paint still filled the halls - there was a more subtle message. The rooms had been meticulously cleaned and tidied. The smart designer beds (left behind because the owners had nowhere to take them), were stripped. The fridge had been emptied, its door conscientiously left open. It was as if this young couple, who had lived in their home for less than a year, thought that they had already caused enough trouble. They had defaulted on their mortgage, had no way of covering the arrears - and a repossession order had given them seven days to leave. The only clue that they had fled in a hurry, and perhaps had nowhere to go, was the stack of post that was piled up in their letterbox.

"In the middle of last year our work really began to pick up," said John, the locksmith employed by Cardiff Count Court to do its dirty work. "Before, we would be going into ex-council places but now it tends to be the nicer houses with the bigger mortgages. Last week we had 36 repossessions booked in." Neil Trezise, the bailiff manager at the court, agreed. "I see these new developments going up and we say 'give it a year and we'll be going in'. It's especially sad when you see children involved. People buy new houses and then they want everything inside to be new. And they think 'we'll pay for it later'. It's their fault for getting into debt, but if you own a house, you get offered money - and a lot of them haven't got a clue about APRs. We're seeing a big increase in repossessions."

His experience tallies with the statistics. Last year's interest rate rises began hitting homeowners in January of 2005. In the first quarter alone, county courts made 14,048 repossession orders - a rise of 35 per cent on the previous quarter. Although the figures are nothing like those seen in the early Nineties, the homeless charity Shelter describes the increase as "alarming".

Shortly after my visit to Cardiff, I went out with a county court bailiff in Bristol. In a single day, three more households are made homeless.

One man, in his fifties, was in bed when he was woken by the screech of the locksmith's drill. His house nestled among the clipped lawns of Bradley Stoke, a private housing estate. When the homeowner, Peter, came to the door, still half asleep, the bailiff introduced himself, and with the politeness and deference of a waiter at an expensive restaurant said: "I am going to have to ask you to leave, sir. You are behind on your mortgage." Peter looked bewildered and began to panic, but the bailiff stood firm.

"You will have to grab a bag for tonight and leave," he told Peter. "The court has given you plenty of notice that this was going to happen. You can come back later and get the rest of your stuff." He explained that Peter had been given more than two weeks' notice by the court and that a repossession order had been granted. But, like so many people who are drowning in debt, he had chosen to look the other way.

The bailiffs went inside to start the process of securing the house so it could be sold. Inside lay the detritus of a chaotic life. Dirty clothes were piled up on the floor, a week's worth of washing-up stagnated in the sink and the smell was overwhelming. But amid the squalor, there were newly-fitted double-glazed windows, a sparkling new fridge-freezer and a top-of-the range washing machine. Piled up in the sitting room were colourful flyers from lending companies offering bigger and better loans, mixed with letters from debt collectors and the county court. It wasn't booze or drugs that led to Peter's misfortune. It was reckless borrowing.

By this spring, households in Britain had clocked up a record-breaking £1 trillion of debt, spurred on by the seven-year housing boom. While banks were willing to give increasingly large mortgages to first-time buyers who struggled to get on the property ladder, many who already owned houses began to use them as though they were bottomless ATM machines.

It was this situation that left Peter in Bristol homeless. He had lost his job as a factory worker in September last year, but because he owned a house, bought 10 years previously, and had equity of more than £70,000, he was still attractive to lenders. Even though he had no job, he was able to buy double glazing on credit and receive loans. By the time he had found new work in April this year, he had sunk so far into debt he couldn't clamber out of it.

As he put a change of clothes into a bag, the locks on his house were swiftly changed and the water system drained. Notices reading "do not use" were stuck to all the taps and heaters. Peter hovered around the back door. He didn't want to leave the house, but the inside was full of unfamiliar faces, dismantling things, taking stock.

How did he feel? He gave a strained, bitter laugh. "I've worked for 40 years to give myself something, and this is what happens. I lost my job and by the time I did finally get work again, I had so much to pay in bank charges on my overdraft and on a loan that I never had anything left for the mortgage." At this, he broke down.

In the kitchen, the agent employed by the lender, who said he carried out around 15 repossessions a day, was cracking jokes. "Can I make anyone a cup of tea?" he asked, pointing at the dirty sink.

At another house we visited in Bristol, the owner lost all control and eventually just begged the bailiffs not to make him leave. His voice rose to a squeal as he told them: "But I have nowhere else to go." They stood firm - they have to - and the man accepted his fate. Looking no one in the eye, he reluctantly gathered up a few essentials and left. He said he was determined to go to court and get his home back, but it sounded like pride talking - as if he knew that he wouldn't but needed to save face in front of the people who had just stripped him of his dignity.

Both of these homeowners had just experienced what bailiffs refer to as "the end of the road". It takes about three months of not paying a mortgage before a high-street lender begins court proceedings. The lender then issues a court summons with a date three weeks ahead for a hearing. The debtor will get an opportunity to make an offer to the bank, but as Mr Trezise explained: "The defendant has to come up with a realistic offer. They can't simply say 'I have nowhere else to go'." If a repossession order is granted, the bailiffs will arrive and take back the property between one and three weeks later. But until the house is actually taken from the debtor, they can appeal and have the order suspended.

It is a long process with plenty of opportunity for the debtor to keep hold of their home. But for some, the debts are so out of control that they seem simply to give up. In Bristol, the repossession order served on Peter lay unopened on his sitting room floor.

For him, now, life is likely to be tough. With a bad credit history, renting from a private landlord will be tricky, as will getting another mortgage. Even local authorities are not obliged to help. By failing to make payments on a mortgage, homeowners are deemed to have made themselves intentionally homeless and councils are not obliged to re-house them, although many will offer emergency rooms.

For the companies that lend money the picture is rather rosier, even if the borrower defaults on their mortgage, according to a spokeswoman for Shelter. "Mortgage companies cannot really lose once someone has taken a loan with them. Even if they repossess, they still get their money back."

It is the bailiffs, though, who end up with the difficult job of recovering the bank's debt. "We go to a house to take away someone's home. We make them do what they don't want to do," said one of the bailiffs in Bristol. "We are not aggressive and it is not something we take lightly, but we are enforcing an order of a court, and we have to be objective. But people want someone to blame, and sometimes they will get fixated on the bailiffs and make them the enemy. I can't eat in half the restaurants in Bristol because my food would probably get spat in."

Many of those who deal first-hand with debt are critical of banks. As Sheila Wilcox, who is in charge of issuing the court summons to debtors at Cardiff County Court, explained: "Two weeks ago, there was a house repossessed that was worth £1m. The owner had got a second mortgage and other loans that took her debt up to £2m. She was known to the county court, and we couldn't believe people were lending her money. In the end we found out she had £3m in unpaid debts and she was unemployed. I blame the lenders for not doing proper checks. They are just throwing money at everyone. I have a two-month backlog of work now. Before, we were issuing about 11 summonses every week. That's jumped up to 11 a day now."

The banks, however, remain tight-lipped about their lending policies. After my trip to Bristol, two high-street lenders contacted the county court to complain that a reporter and photographer had accompanied its bailiffs. A spokesman for the Council of Mortgage Lenders would only say, somewhat tersely, that its position remained that banks lent money responsibly.

For the three former house owners I spoke to, their first nights as homeless people were either spent on relatives' sofas or in hostels. Peter said he had nowhere to go, and would try to find emergency housing, either from the council or a charity. I tried to explain to him that whatever happened, he would be entitled to the profits from the sale of his house, once his debts had been deducted. But he pointed at the bailiffs and spat: "What will they give me?" And with that, he cycled away clutching his small bag.

Some names have been changed