Repossessions rise by 3%

12 November 2009

A house

New figures from the Council of Mortgage Lenders released today show the number of repossessions rose by 3% in the third quarter of the year to 11,700. The total number of repossessions for this year are predicted to be 48,000.

Kay Boycott, Director of Policy and Campaigns for Shelter, said:

'The combination of low interest rates and Government initiatives have clearly helped stabilise the rising tide of repossessions.

'But this is no time for complacency or congratulations as this is still the highest level of repossessions we have seen for over a decade. The CML’s prediction shows growing unemployment will have a sustained impact on repossession levels next year. This, coupled with Government support schemes potentially coming to an end in the next 12-18 months, means we are not out of the woods yet.

'Access to advice and support schemes have been crucial and will continue to be crucial in helping people keep their homes. With over 200,000 homeowners saved from repossession by the Support for Mortgage Interest scheme (SMI) we would have undoubtedly seen far more repossessions if this help had not been available. 

'Government must promise to keep Support for Mortgage Interest (SMI) at the current levels of interest and eligibility in the Pre Budget Report and commit more money in order to keep vital advice services going through this continued crisis.'

Research released by Shelter last month shows that banks are still offering unaffordable mortgages that would leave borrowers with living costs of just £53 a month over the Minimum Income Standard for a single working male, as calculated by the Joseph Rowntree Foundation.

Ms Boycott continued 'As our research shows we are still failing to learn the lessons of the past, despite the huge housing crisis continuing to grow.

'Banks have a responsibility not to put people at risk of losing their home by knowingly lending them money which they obviously can’t afford to pay back. Banks must put an immediate end to the irresponsible lending which leads to thousands of people undergoing the trauma of repossession down the line. 

'The FSA accepted tough action is needed in their recent mortgage market review and these changes must be implemented as soon as possible.'

Ms Boycott added: 'We are also looking forward to the introduction of greater protection for private tenants who face sudden homelessness when their landlord is repossessed. The Government is looking to introduce this in forthcoming legislation and we would be extremely disappointed if this was not seen as a priority.'

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