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Repossessions Rocket



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According to the Financial Services Authority (FSA) the number of home being repossessed has gone up by a staggering 92% in a year. The authority’s statistics say that a total of 13,161 dwellings were repossessed in the third quarter of last year – 92% more than in the same period for 2007. More bad news was the number of borrowers who are behind on their mortgage has also increased by 24% during the year, up to 340,000 – a 10% rise on the previous quarter.

The FSA’s figures are in line with those reported by the Council of Mortgage Lenders (CML) in November of last year for the same period. They showed that 11,300 homes were repossessed by their members in the third quarter of 2008 – 12% more than in the second quarter. Their findings also indicated that 168,000 borrowers were more than three months in arrears with their mortgage.

The figures also show lenders who repossess homes are struggling to sell them on. As a direct consequence of this glut of repossessions, the number of unsold repossessed homes rose dramatically during the third quarter of 2008 to 27,123 – up a hefty 111% on the same period of 2007. This data is substantiated by the fact that lenders only managed to sell 7,687 homes in the quarter compared to 7,000 in the previous three months.

Data from the FSA on the mortgage market stated that the total value of outstanding home loans edged forward slightly to £1.194 trillion - up 0.5% on the second quarter of 2008. New advances during the period totalled £61bn – 15% lower than the previous three months. Net lending, which does not include redemptions and repayments, fell by 36% during the quarter in question and by 65% year-on-year.

House Prices 16.6% Lower Than One Year Ago

The latest report by the Nationwide suggests that January 2009 has wiped a further 1.3% off the value of the average home and at £150,501; the average house price is now 16.6% lower than one year ago.  The building society had previously indicated that property prices had fallen by a total of 15.9% during 2008.  Nationwide were also quick to dismiss Housing Minister Margaret Beckett’s claim that there were signs of an upturn in the housing market – an opinion that was based on figures that showed an increase in potential buyers signing up with estate agents.  The building society said that the “relationship between buyer enquiries and approvals had broken down”.

 

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The latest Land Registry figures, which are based on completion figures and lag behind lender’s surveys, are slightly healthier than the Nationwide.  They show that house prices fell by 13.5% in 2008 to an average of £158,946.  The 2% fall that the registry recorded in December takes property prices down to a similar level last seen in October 2005.  Although its figures showed a decrease in prices for all regions in England and Wales over the whole of 2008, it actually recorded a rise of 1.7% in the value of property in Wales and the North East of England for December.