Home repossessions and mortgage arrears have increased significantly over the year.

According to the Council of Mortgage Lenders (CML), the number of repossessed homes has risen by almost 50% from 2008 to 2009.
 
In the first quarter of 2009, the number of repossessions rose to 12,800. In the first three months of 2008, the figure was 8,500.

The CML had predicted that the number of homes being repossessed in 2009 was likely to be 75,000. Despite figures rising, the CML has now stated that this initial prediction was “pessimistic” and will release a revised figure with the next housing market forecast update.

Mortgages in arrears also continued to grow. The number of loans with arrears of more than 2.5% rose by 12% from 182,600 in the fourth quarter of 2008 to 205,300 in the first quarter of this year.

Despite the rise in arrears and repossessions, CML General Director Michael Coogan spoke for the mortgage companies said: “Lenders are acutely conscious that behind the statistics are real people, many of whom are affected by the economic downturn and its impacts on unemployment, changes in circumstances and inability to refinance.

“Lenders genuinely want to help borrowers where borrowers are committed to working with them […] Lenders are demonstrably increasing the forbearance they are offering, while many struggling borrowers have gained some breathing space through lower interest rates feeding through to lower monthly payments.”

Mr Coogan also offered advice to any borrowers who may be struggling: “The key message continues to be: talk to your lender as soon as you identify difficulties emerging, take advice from an independent money adviser if you have other debt issues as well as your mortgage.

“Lenders do not want to repossess if a realistic alternative solution can be found.”