Home repossession orders soar by 66 per cent as debt mounts By Ian Cowie, Personal Finance Editor (Filed: 27/10/2005)
A rise of 66 per cent in repossession orders against home buyers across the country was disclosed yesterday. Londoners were hit even harder, with an 81 per cent increase.
Mortgage brokers blamed the expiry of cheap fixed-rate deals this year, which caused some borrowers' monthly bills to rise sharply.
Lenders said that only a tiny percentage of borrowers was affected but accountants said the figures were no surprise now that consumers owed more than £1,000 billion, exceeding the debts of Africa and South America put together.
The figures were issued by the Department for Constitutional Affairs. It said that county courts granted mortgage lenders a total of 19,687 orders during the third quarter of this year. That was two thirds more than in the corresponding period last year and the highest since 1996.
The Citizens Advice Bureau said that some providers of consolidation loans were increasingly aggressive and willing to go to court.
Philip Cartwright, of the mortgage brokers London & Country, said: "Lots of people took out very low fixed-rate deals in 2003 which finished this year.
"For example, you could lock into 3.24 per cent for two years with the Britannia Building Society in July 2003 but its standard variable rate is now 6.1 per cent."
Steve Blore, of Nationwide, said: "Lenders take possession only as a last resort. If people are having trouble with payments, we seek to talk to them and come to an arrangement."
Sue Anderson, of the Council of Mortgage Lenders, said: "The department's figures show the number of cases that lenders take to court and the number of orders granted by the courts. But these figures are much higher than the number of repossessions. In the first half of this year 54,344 actions were entered and 32,366 orders made but only 4,640 repossessions took place."
Mark Allen, of the accountants Grant Thornton, said: "Consumer debt is at a historical high of about £1.1 trillion and amounts to more than the whole external debt of Africa and South America combined.
"Contributing to this debt mountain is the fact that consumers have a heady total of more than 66 million credit cards at their fingertips - five times the European average."
George Osborne, the shadow chancellor, said: "Gordon Brown's tax rises have not helped families struggling to make ends meet."
