CML survey reveals an eight year high of 27,100 homes were repossessed in 2007.
Today the Council of Mortgage Lenders confirmed recent doom and gloom speculation about the UK housing market with news that property repossessions were up 20% in 2007.
Last year saw over 27,100 homes being reclaimed by lenders after homeowners were unable to keep up with repayments. While this figure represents an eight year high in the repossession rate, things aren’t quite as extreme as they first seem.
The numbers announced by the CML were actually 10% lower than earlier forecasts predicted with repossessions affecting only 0.23% of all the UK’s mortgaged properties, a figure that equates to fewer than one in four hundred homes. Additionally the repossession rate was less than half that experienced during the housing crisis of the early nineties, putting the situation into perspective a little.
The CML announced that while the number of repossessions may continue to rise in 2008 as 1.4million homeowners come off fixed rate deals that were set when interest rates were significantly lower, the ‘credit crunch’ that took effect in the latter half of 2007 doesn’t appear to have been the driving force behind the 20% increase.
Their research, which surveyed over 98% of the UK’s mortgage lenders, found that the number of repossessions in the second half of last year were actually slightly down on those actioned in the first six months with figures being 13,500 and 13,600 respectively. This suggests that while banks may be struggling under the credit crisis the impact hasn’t quite filtered down to the public domain so far.
How long this will last remains to be seen as despite yesterdays announced reduction in the Bank of England base rate, with lenders tightening their eligibility criteria, many homeowners may face difficulty remortgaging their home to take advantage of the lower rate deals now available.
