UK Repossessions Rise

The Council of Mortgage Lenders reported a 41% rise in home repossessions in the first 6 months of this year.

18,900 homes were seized in the first 6 months of this year compared to 13,000 in the last 6 months of 2007.

The number of people in arrears by more than 3 months also rose by 29,000.

The Council of Mortgage lenders forecast a total of 45,000 repossessions by the end of the year.

Although the statistics (41% jump) are alarming, the % of homeowners defaulting is still relatively small. The vast majority still continue to meet mortgage payments However, homeowners have faced a tough 6 months, with disposable incomes squeezed by:

• Rising energy prices
• Rising petrol and diesel prices
• Increased cost of remortgaging, reflecting interest rate rises during 2007.

Negative Equity and Falling House Prices

• The Halifax reported further large falls in house prices in July. Prices fell by £3,000 in one month. The biggest monthly fall since 1983.
• House prices are have now dropped £22,000 from their peak.
• The Bank of England voted to keep interest rates constant at 5%