Mortgage repossession orders soar by 66 percent in Q3 |
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Published
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Thu, 27 Oct 2005 08:50
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LONDON - Fresh evidence that the housing market is all but stagnant was revealed by the Department of Constitutional Affairs, which reported that the third quarter saw the mortgage repossession orders soar by a massive 66 percent.
Around 29,991 mortgage possession actions reached the county courts in the third quarter. The number of orders issued in the three months ending September hit 19,687 in England and Wales. Out of these 10,340 were suspended orders. The total number of action taken orders mounted to 55 percent. This is the highest number since 1993.
The repossession orders had hit a low of 9,616 in the first three months of 2003. Analysts say that the number of orders issued does not actually reflect how many homes were repossessed, but still provides a glimpse in the workings of the housing market.
That the homeowners are facing a problem can be gauged from the fact that the Bank of England hiked the interest rates form 3.5 percent to 4.75 percent between November 2003 and August 2004 forcing mortgage holders to pay £70 more each month. Although, the Bank has cut the interest rates to 4.5 percent in August, this does not appear to have made much difference to the consumers.
"The increase in mortgage possessions fits with the slowdown in house price inflation," said Alan Clarke, economist at BNP Paribas. "The conclusion is there are still signs of financial stress among home owners."
The Council for Mortgage Lenders (CML) had issued figures in July that showed 4,640 homes were repossessed in the first six months of the year. This is still substantially high when compared to 3,070 homes in the previous six months. The CML has forecast that up to 10,000 homes will be repossessed by the end of the current year.
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