UK home repossessions jump 48 pct to 9-yr high

LONDON - The number of homes repossessed in Britain in the first six months of the year leapt by almost 50 percent on a year ago to the highest since 1999, a survey showed on Friday, as the housing downturn claims more victims.

By (Reuters)

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Published: Fri 8 Aug 2008, 6:53 PM

Last updated: Sun 5 Apr 2015, 11:51 AM

The Council of Mortgage Lenders said repossessions rose to 18,900 from 12,800 in the first half of last year, taking the rate of repossessions to 0.16 percent -- the highest in a decade.

The figure was still well below the peak of 38,900 in the first half of 1991.

That was in the middle of a housing market crash when double digit interest rates and sharply falling house prices cost hundreds of thousands of people their homes because they could not meet their mortgage obligations.

Official interest rates are now pegged at just five percent and house prices, while falling sharply, have only been in decline for a few months after a decade in which they trebled.

However, there are fears that further falls in prices could push more than a million heavily-indebted Britons into negative equity -- when the value of the home is worth less than the outstanding mortgage -- at a time when new funding is scarce.

The number of households with mortgages in arrears for three months or more rose by nearly a third on a year ago to 155,600 in the first half of this year, the CML said.

Analysts say more and more homeowners may face difficulty in the coming months as they have to refinance fixed rate mortgage deals taken on a few years back before the credit crunch forced lenders to toughen up their terms.

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