House repossessions increase 71 per cent compared to 2007

The number of people who have had their homes repossessed has increased by 71 per cent compared to last year, new figures show.

The Financial Services Authority said 11,054 homes were repossessed in the three months to the end of June, compared with just 6,476 during the same three months of 2007.

The regulator said the number of repossessions had been growing “significantly” since the third quarter of last year, as increasing numbers of homeowners struggled to clear arrears they had built up.

The FSA defines a repossession as an arrears case where the lender has been formally granted a possession order by a court and is then able to sell the underlying property against which the loan has been secured.

The average home is now worth £168,814, having dropped 2.2 per cent in September.

The fall left the annual rate of decline for the year to the end of September at 8 per cent, nearly double the 4.6 per cent slide announced in August, which at the time was the biggest annual drop recorded since the series began in 2001.

The latest Land Registry figures are not as steep as those reported by the Nationwide and Halifax, which showed falls of 10.5 per cent and 12.7 per cent respectively. This is because the Land Registry bases its calculations on when transactions are completed.

September was the 13th month in a row that the annual rate of house price growth declined, as the credit crunch continued to squeeze the property market.

All regions of England and Wales recorded price falls on both a monthly and an annual basis. Wales saw the biggest slide, with prices diving by 5.5 per cent during the month, making it the only region to have seen double digit annual falls of 10.7 per cent.

The South West, South East, North East and East Midlands all recorded house price drops of more than 2 per cent in September. Yorkshire and the Humber saw the smallest reduction, but even here properties still lost 1.2 per cent of their value during the month.

On an annual basis, the East Midlands and South West have seen the biggest price slides after Wales, with falls of 9.9 per cent and 9.7 per cent respectively.

London has seen the smallest year-on-year decline at 6.1 per cent, followed by the North West at 6.3 per cent.

By Myra Butterworth, Personal Finance Correspondent
Last Updated: 4:00PM GMT 28 Oct 2008

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