It is expected 45,000 homeowners will lose their homes by the end of 2008.

The number of UK homes repossessed by mortgage lenders increased almost 50% during the first half of 2008, according to new figures from the Council of Mortgage Lenders (CML).

Almost 19,000 homes were repossessed during the period, up from 12,800 in 2007 and the highest figure for 12 years.

CML attributes the rise to the economic slowdown and said many homeowners may have been further hit by reduced availability of remortgaging deals.

The number of homeowners failing to keep up with their repayments has also risen, the Council said. The total number of households with arrears of three months or more was 155,600 at the end of the six-month period, up from 129,600 at the end of 2007 and 120,800 at the end of the first half of 2007.

CML said it expects repossessions to total 45,000 by the end of the year, however was quick to point out that the figure is nominal in context of the 11.74 million mortgages currently held in the UK.

Commenting on the current situation, CML Director General, Michael Coogan, said:
“The number of people facing difficulty needs to be kept in perspective. The good news is that most people are coping well and continuing to pay their mortgages in full, despite the higher costs of food and fuel and the higher mortgage rates now prevailing in the market for those coming off cheaper original deals.

“But it is inevitable that more borrowers’ coping strategies will come under pressure in current conditions than in the unusually benign years of the last decade. That’s why lenders, government and the advice sector are working closely together to minimise the impact on borrowers.”

For more information on the report, visit the Council of Mortgage Lenders website: www.cml.org.uk

By Natasha Piscitelli