The total number of UK homes taken into possession by mortgage lenders has reached 40,000 in the UK for 2008. This is a 12 year high, according to figures from the Council of Mortgage Lenders.
There were approximately 10,400 properties repossessed in the Q4 2008, which is down from 11,100 in Q3 2008. Despite this minute fall, the number of repossessions in the quarter was nearly double that of the record in Q4 of 2007.
The Ministry of Justice data also released in February 2008 shows a 35% drop in the number of claims for possession made by lenders. The Ministry of Justice attributes this to the launch of the Mortgage Pre-Action Protocol. Do we agree or is it simply that people pockets were not deep enough coupled together with job losses. The MoJ aim was to reduce the quantity of claims made by all parties and for them to explore alternative options to legal action.
However, Capital Economics property economist Ed Stansfield said mortgage possessions were on course to match, or exceed their previous peak of 75,500 seen in 1991. “Unemployment is set to reach double digit rates as the recession runs its course. We believe that this will have a greater impact on mortgage arrears than either government initiatives or lower interest rates.”
Senior economist Brigid O’Leary from RICS said “the data provided welcome indications that government intervention to minimise possessions was having some effect. In spite of increasingly difficult economic circumstances, both the number of houses taken into possession and the number of mortgage possession actions issued actually fell,” she said.
“However, the proportion of mortgages in arrears continued to increase, and that trend is likely to continue as economic circumstances deteriorate.”
We are not out of the woods that is for sure, loss of jobs and people on fixed mortgages are paying the price of these uncertain times.
Do you think house repossessions will increase in 2009, compared to 2008?