House Seizures Soar By 70%!

Mortgage lenders seized more than ten thousand homes last year. Here's what you can do to avoid putting your home on the line.

According to the latest figures from trade association the Council of Mortgage Lenders (CML), mortgage repossessions rose by seven-tenths (70%) last year.At first glance, this appears to be shocking news, but the reality is far less worrying. That's because repossessions hit a 23-year low in 2004, and so the increase, although large in percentage terms, is still low in absolute terms.For the record, mortgage lenders seized 5,630 properties in the second half of 2005, up two-ninths (22%) on the 4,620 repossessions recorded in the first half of the year. Hence, the total number of repossessions in 2005 was 10,250, up a whopping 70% on the 6,030 repossessions recorded in 2004. However, 2005's figure was the third-lowest annual total since 1983.To put these figures into context, repossessions peaked at 75,540 in 1991, when 1 in 130 properties (0.77%) was seized by mortgage lenders. The figure for 2005 was 1 in 1,131 (0.09%), a mere fraction of 1991's result.What's more, home-ownership has risen dramatically over the last thirty-five years, and rising house prices mean that British homeowners now have around £3,300 billion of housing wealth. The following table shows just how dramatic this rise in home-ownership (and mortgage debt!) has been:Year No. ofmortgagedproperties(millions) Totalmortgagedebt (£bn)19704.2n/a19755.1n/a19806.2n/a19857.7n/a19909.4294199510.5390200011.2536200511.6965The amazing increase recorded in the Eighties was thanks to Mrs Thatcher's policy of encouraging people to buy their homes. Mrs T's policy certainly worked, as the number of mortgaged properties rose by 3.2 million, an increase of more than half (52%). Growth in the Nineties was much more subdued, up by less than a fifth (19%), or 1.8 million mortgages. Over the last five years, it's slowed to a crawl -- up less than 4% from 2000 to 2005.Nevertheless, over ten thousand homes were seized in 2005, which means that around 25,000 people either handed back their keys to their mortgage lenders, or lost their homes through the courts. Furthermore, things are set to get worse, with the CML predicting annual repossessions will rise to 12,000 for both this year and next.As well as mortgage repossessions, the CML released data on mortgage arrears. At the end of 2005, 59,700 mortgage borrowers were between three and six months in arrears, up 11% on 2004's total. A further 32,470 were between six and twelve months in arrears (up 21% on 2004), and 13,820 were more than a year in arrears, up 23% year-on-year. The total of these three figures comes to just short of 106,000, and the CML expects arrears cases to rise to 120,000 in 2006 and 2007.The CML's advice to homeowners worried about keeping up their mortgage repayments is to review their financial commitments, cut back on unnecessary spending, and shop around for a better mortgage deal. It also recommends that borrowers buy mortgage payment protection insurance (MPPI), but I wouldn't buy a policy from your mortgage lender, as I explained in The £10 Billion Mortgage Protection Racket!Finally, if you want to take steps to secure the roof over your head, read these articles:When Mortgages Turn MeanYour Home Could Become A PrisonLessons From The Last Housing CrashHow To Dodge The Financial HurricaneHere's wishing you many years of worry-free home-owning!More: Get a happier home loan here | Slash your premiums in our Insurance centre.