Repossessions every 10 minutes

The number of home repossessions in the UK has soared, with one home repossessed every 10 minutes. The statistics which come from the Financial Services Authority (FSA) take into account the total number of repossessions which took place during the third quarter of 2008.

The total number of repossessions during the period outstripped all expectations, with 13,616 homes repossessed during the three month period to September 2008. This is a staggering 92% increase on the amount of repossessions during the same period in 2007.

As a result of trying economic times, there has been a significant upturn in the amount of people falling behind with mortgage payments and subsequently facing property repossession. The Council of Mortgage Lenders’ prediction that 225,000 people would be behind on their mortgage payments by the end of 2008 has proved to be a significantly underestimated figure as around 340,000 borrowers were behind on their repayments in the third quarter of 2008. This is a 24% increase on the same period in 2007.

Furthermore, the CML have predicted that the number of homeowners behind on their mortgage repayments will increase to 500,000 by the end of 2009 and the number of repossessions will rise to 75,000. As the recession in the UK is set to continue, further job losses are imminent which leads to people falling behind on their mortgage payments. Although banks must now offer an extended grace period, once that grace period ends, repossessions are likely to increase.

It is a worrying situation for many people across the UK as the impact of the recession hits homeowners. Those who purchased a home with a mortgage deal at high loan to value (LTV) are in a particularly difficult situation as the value of their home depreciates and they risk falling into negative equity.

The threat of repossession following a series of months of falling behind with mortgage payments is unfortunately unavoidable. When a mortgage is taken out, the finance is secured against your home and if payments cannot be met, you risk repossession. Repossession itself is avoidable, however and you can stop repossession of your home.

The quickest way to avoid repossession is by selling your home and releasing the equity from it. However in the current property market, this is proving to be a problematic option, with the availability of buyers on the market at a slump. An alternative arrangement such as selling your home and renting it back allows you to stay in your home even if you are facing repossession. This type of scheme allows the equity to be released from the home and mortgage payments to be recouped and finally offers the possibility to stay in the home and rent it back.