Banks repossessed 11,300 homes between July and September 2008.

Repossessions rose 12% in the third quarter of 2008, fuelled by increasing numbers of homeowners struggling to meet their repayments, according to new figures from the Council of Mortgage Lenders (CML).

During the period July to September, banks repossessed 11,300 homes, compared with 10,100 properties in the second quarter of the year, CML said.

The number of cases in arrears has also increased – at the end of September, 168,000 homeowners were behind on their repayments, 8% higher than at the end of June.

The future is looking even bleaker, according to CML’s forecasts. The Council said it expects that by the end of 2008 more than 170,000 households will be in arrears, whilst repossessions could top in excess of 45,000.

CML’s predictions are backed up by figures released by the Ministry of Justice today (21 November) which show the number of repossession proceedings started against borrowers has also risen.

Ministry statistics reveal that between July and September, courts received 38,511 mortgage possession claims. The figure is actually 1% lower than in the second quarter, but marks a 9% increase year-on-year.

CML Director General, Michael Coogan, has stressed the importance for struggling homeowners to communicate with their lenders.

He said: “The CML and lenders are absolutely committed to ensuring that repossession is only ever a last resort. Most borrowers who face payment problems successfully keep their home by working with their lender – anyone worried about mortgage payments should contact their lender at the earliest opportunity, before arrears start to build up.”

By Natasha Piscitelli