The number of properties repossessed by mortgage lenders rose in the first half of 2006, new figures from the Council of Mortgage Lenders (CML) reveal.

However, the growth rate of long-term arrears slowed down and shorter-term arrears fell, suggesting that the outlook for the housing market is not necessarily one of increasing numbers of repossessions, according to the CML.

The number of repossessions in the first half of the year stood at 8,140, the highest level since the first half of 2001 and up from 5,690 in the second half of 2005.

Possessions have increased due to interest rate rises between autumn 2003 and summer 2004, said the CML, causing a knock-on effect which has pushed arrears up and filtered through to the number of possessions.

At the same time, the number of mortgages three to six months in arrears fell to 61,470 from 62,920, while mortgages six to 12 months in arrears saw little change.

"It is bad news for the individuals concerned if the numbers of repossessions have increased, but I think the thing to remember is it is still actually at very low levels compared to what it was a few years ago," said Neil Johnson, PR and policy manager for the Building Societies Association.

However, he said that the recent interest rate rise should serve as a warning to people not to overstretch themselves to get onto the property ladder.

Return to News index