Debt News

Increase of arrears and possessions "not surprising"

8 August 2008

The numbers of people facing mortgage arrears and property possession "have increased from their low base rate as expected", according to the latest figures from the Council of Mortgage Lenders (CML).

In the first half of 2008, the possession rate rose to 0.16 per cent from 0.1 per cent throughout 2007.

The arrears figure was 1.33 per cent of all mortgages, an increase from 1.02 per cent at the end of 2007.

However, the CML explained: "The overwhelming majority of the UK`s borrowers continue to pay their mortgages in full every month and will continue to do so."

It has blamed the credit crunch for the increases, as the adverse credit sector has been hit harder than most of the mainstream.

Additionally, those considering remortgaging as a means to tackle debt problems have had difficulties finding deals, the CML said.

There are 11.74 million mortgages in the UK, which indicates arrears and repossession rates are "extremely small".

According to July`s House Price Index from Halifax, the average property price has dropped 1.7 per cent.