Repossessions

Northern Rock repossessions up Northern Rock saw repossessions jump by 63% in 2008, while making a ?1.4 billion loss

It held 3,620 repossessed homes at the end of 2008, up from 2,215 a year earlier but lower than the 4,201 it held at 30 September 2008.

The nationalised bank has reduced its government loan, paying off ?18 billion of its ?26.9 billion loan. It has also confirmed that it will offer ?14 billion in lending over the next two years. New mortgage lending at the bank was about ?2.9 billion in 2008, compared with ?29.5 billion in 2007.

The Financial Services Authority (FSA) has published today its latest mortgage lending data covering the period from Q1 2007 to the end of Q2 2008.

The report shows the total value of mortgage arrears is ?1,178bn, an increase of 7.5% compared to a year earlier. But quarterly growth continues to slow, with a Q2 increase of just 1%;

New lending peaked in Q3 last year at ?102bn before declining to ?72bn in Q2, leaving gross lending 26% lower than a year earlier.

Loans to borrowers with an impaired credit history represented 2.1% of new lending in Q2, compared to 3.4% a year earlier.

While the number of new arrears cases has stayed constant at around 54,000 each quarter since early 2007 consumers are increasingly struggling to clear their arrears and consequently the total number of accounts in arrears is increasing. At the end of Q2 there were 312,000 loan accounts in arrears, an increase of 3% on Q1 and 16% up on a year earlier, with the total amount of arrears now standing at ?1.6bn.

Numbers of new possessions have grown significantly since Q3 last year, with the 11,054 new cases in Q2 (after 9172 in Q1) being 71% higher than a year earlier.

The Council of Mortgage Lenders said there were 27,100 repossessions, the highest figure since 1999, after people fell behind with repayments.

The figure for the UK is more than the 22,400 in 2006, but not as extreme as the CML had forecast. It is still a sharp rise on the 8,500 of 2003.

The CML warned that the number of repossessions was likely to rise again in 2008 as the credit crunch tightened.

Meanwhile, the numbers of mortgages behind on payments rose by 8.6% compared to 2006, the organisation, which represents mortgage lenders, said.