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More home repossession pain
The number of mortgage possession claims (non-seasonally adjusted) brought to court by lenders increased from 34,689 in Q4 2007 to 40,442 in Q1 2008, according to new figures from the Ministry of Justice. The 16% increase; year-on-year, takes the number claims to their highest level since 1992 - the last time the UK economy had a major housing market downturn.
Meanwhile, the number of court orders awarding possession of properties to lenders rose to 26,930 in Q1, up 11% on the year - 53% of those being immediate (as opposed to suspended) possession orders. The number of claims made by landlords against tenants in arrears rose by 4% year-on-year to 38,878.
Economics consultancy, Capital Economics, makes the point that while the latest figures are still some way off the highs reached during the 1990s housing market crash; they strongly suggest there has been a sharp rise in the number of households struggling to meet their mortgage payments in recent months.
Worth noting of course is that not all possession orders result in the borrower losing their home. That said, the full extent of the credit squeeze is yet to be reflected in this data. What's more, if the economy slows significantly and the labour market weakens as forecast, the number of possession actions, as well as actual possessions, could yet rise significantly, says Capital.
In a separate but related development the Government has announced plans to boost debt advice, as well as providing free legal representation in English county courts to help homeowners avoid repossession. And it intends working with lenders to provide more information for borrowers who could be getting into trouble.
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