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Mortgage possession orders and home repossession continues to rise

Written by on 30 January, 2009

The third quarter of 2008 has seen an increase in Mortgage Possession Orders in the County Courts, according to statistics released by the Ministry of Justice.

A total of 29,516 mortgage possession orders were issued in England and Wales on a seasonally adjusted basis – a steep increase of 4% on last quarter. Even more alarmingly, the third quarter of 2008 has revealed a 24% increase compared with the third quarter of 2007.

Although possession orders do not always end in repossession, figures issued from the Financial Services Authority (FSA) show a 92% increase on the amount of homes actually being repossessed in comparison to the third quarter of 2009.

The FSA reported a total of 13,161 homes were repossessed by lenders in the third quarter of 2008, as households across the UK continue to struggle with home loan repayments in this grim economic climate.

While the amount of mortgage possession claims issued has only risen by 9% since the third quarter of 2007, the amount of mortgage possessions ordered by County Courts continues to rise. Regionally, Wales was the hardest hit with a 38% increase since the third quarter of 2007, while the Midlands saw the lowest increase in England of 16%.

Despite the amount of homes being reported as repossessed is smaller than the amount of repossession orders issued, these figures show a sharp increase on what has been a turbulent year for home owners and lenders. The findings also show the harsh reality of the consequences that come with not keeping up with mortgage payments.

There has not been much good news for renters either, with an increase in landlord possession orders reported in the County Courts as well.

Some 36,923 landlord possession claims were made, with 28,086 orders granted in the third quarter of 2008. This figure has risen 4% since the same quarter last year and shows that it’s not just UK homeowners struggling with finances.

These new reports are a cause for concern within a difficult year for the housing market. The credit crunch continues to make lenders hesitant to grant mortgages, while the ever present effects of rising household bills and mortgage costs hit households across the United Kingdom.

Data source: The Insolvency Service

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