Repossessions hit 14-year high in 2009

The Council of Mortgage Lenders (CML) has reported that the total number of repossessions in 2009 was 46,000 – the highest since 1996.

Meanwhile, the Ministry of Justice has released the latest statistics on mortgage possession actions in the county courts during the fourth quarter 2009.

The report reveals that 20,061 mortgage possession claims were issued on a seasonally adjusted basis, 26% lower than in the fourth quarter of 2008 and 15% lower than in the third quarter of 2009.

16,928 mortgage possession claims led to orders being made on a seasonally adjusted basis, 42% lower than in the fourth quarter of 2008 and 15% lower than in the third quarter of 2009. Furthermore, 46% of mortgage possession claims leading to orders being made were suspended compared with 45% in the fourth quarter of 2008 and 44% in the third quarter of 2009.

Simon Rubinsohn, Royal Institution of Chartered Surveyors (RICS) chief economist said:

“Data released [...] both the Ministry of Justice and the Council of Mortgage Lenders provides further evidence that the fall out from the downturn in the housing market in terms of repossessions is proving relatively modest compared with the experience of the early 1990′s. This in part reflects the Mortgage Pre Action Protocol that came into effect in November 2008. It is, however, also a direct result of the low level of interest rates which has kept mortgage funding costs at historically low levels and thus limited the pain on homeowners during the recession. Significantly, although unemployment has risen sharply during the downturn, the increase has been much more modest than was expected and considerably lower than in the previous recession.”

“Looking forward, we suspect that the number of repossessions in 2010 will be broadly in line with that seen over the past twelve months (46,000). Significantly, we continue to believe interest rates will remain on hold for much of this year, helping to keep down mortgage costs (a view reinforced by yesterday’s Inflation Report) and there are some encouraging signs that the jobs market appears to be stabilising with employment actually rising in the latest figures.”

Liberal Democrat Shadow Housing Minister, Sarah Teather commented:

“Labour stoked up the housing market by allowing reckless lending and is now failing to help those who are suffering most. It is completely unacceptable that more than 100 families a day are being thrown out of their homes.

“The courts need to be given more powers to intervene in repossession cases so that repossession is only ever a last resort. With mortgage rescue only helping a tiny fraction of those in need, the Government needs to get its act together fast.”