Brown blamed for rising mortgage repossessions
Rising mortgage repossessions blamed on Brown
Friday, 09, May 2008 12:00
Mortgage possession claims in Britain have jumped upwards, figures from the Ministry of Justice (MoJ) show.
During the first quarter of 2008 some 38,688 claims were issued by UK lenders.
In comparison some 35,662 mortgage possession claims were issued in the final quarter of 2007 – representing an increase of 8.5 per cent.
Commentators say the figures reflect the growing tightness of the UK economy, with stretched credit leaving more and more struggling home-owners unable to meet their mortgage payments.
Liberal Democrat economic affairs spokesperson Vince Cable said the number of families threatened with repossession was now approaching that seen in 1991, when recession under the Conservative government was at its height.
"The prime minister's pride and stubbornness has made him completely unwilling to recognise the dangers in the housing market. It is overstretched households that will pay the price," Mr Cable said.
"This government must stop having vague discussions with mortgage lenders and instead clearly lay out the procedures which must be followed before a property can be repossessed."
The Council of Mortgage Lenders (CML) offers a further measure which shows the problem is continuing. Its research reveals 27,100 mortgages ended in actual repossession in 2007.
This represents 0.23 per cent of the market as a whole – less than half the level experienced during the early 1990s.
However, the CML expects the repossession rate to rise to 0.38 per cent this year – with 45,000 properties repossessed.
The news of an increase follows an announcement on April 22nd from the government that those in financial trouble and facing repossession would receive assistance from the government.
Measures are particularly focused on the 1.4 million borrowers coming to the end of a fixed-rate deal during 2008.
With mortgage lending criteria tightening dramatically in first quarter of 2008, such borrowers are likely to face an increase in repayment rates.
In response the government has announced plans to develop a new debt advice service with the National Housing Advice Service; train specialist staff at Citizen's Advice; and arrange free legal representation for those facing a court appearance.
"For the minority of owners who may need support and advice now, we want to ensure it is there for them in the right place and at the right time," said housing minister Caroline Flint in April.
"It is important to recognise we are dealing with an entirely different situation in the market from what was experienced in the early 1990s."