Numbers losing their homes up by 15pc as cuts bite

The Council for Mortgage Lenders yesterday published figures which show repossession rates have increased for the first time since the autumn of 2009, with a total of 9,100 properties having been taken over by lenders during the first quarter of the year.

It came as Ministry of Justice data revealed that repossession claims issued in courts in England and Wales rose for the third consecutive quarter during the first three months of 2011 to 20,034. The figures are three per cent higher than for the previous quarter and eight per cent higher than during the same period of 2010.

The MOJ figures showed North East Lincolnshire, along with Corby and Barking and Dagenham, as being the local authority areas with the highest number of mortgage claims and claims leading to orders for repossession.

Nationally areas in the North East and North West had the highest number of mortgage claims and claims leading to orders per 1,000 households, reflecting concerns economic problems and the coalition Government’s spending cuts are hitting northern regions the hardest.

Experts last night said the increase was driven by high unemployment, with the latest figures showing 2.48 million people are out of work, as well as rising living costs, higher taxes and muted wage growth.

Michael Coogan, director general of the CML, said: “Looking ahead, the financial position of many households is likely to be stretched for some while, and some will inevitably find themselves in difficulty. Lenders have a range of options to nurse borrowers through temporary problems, but will clearly need to be mindful of the regulator’s concern that too much forbearance may be as bad as too little.”

The Council of Mortgage Lenders expects repossession numbers for the whole of 2011 to be higher than last year at 40,000, up from 36,300.