Repossessions approach early 90s high

The number of home repossession claims in England and Wales soared by 16% in the first quarter of 2008 from the same time last year, near to levels last seen in the recession of the early nineties.

Almost 39,000 mortgage possession claims were issued on a seasonally adjusted basis, that's 7% higher than in the fourth quarter of 2007, said the Ministry of Justice Friday.

Things haven't been so bad since house prices tumbled almost 20 years ago and more than 145,000 claims were issued in total during 1990, hitting a peak of 186,649 a year later. Mortgage repossession orders rose 17% to 27,530, which was 9% higher than the fourth quarter of 2007.

Today's report also revealed that 37,221 landlord possession claims were issued in the three months to March, up 4% on the first quarter of 2007 and the same as the previous quarter. It comes as the government announced plans to help homeowners having trouble paying their mortgages, including free legal advice for those faced with repossession.

The chairman of the Building Societies Association (BSA) warned yesterday that it will take at least two years for mortgage markets to recover from the credit crunch. When global and domestic markets do recover, homeowners should expect them to operate in a "very different" way to how they were in the first part of the decade, Iain Cornish told the BSA conference in Manchester.

Mortgage lenders have already slashed the number of home loans on offer, failed to pass on a series of interest rate cuts and increased the minimum deposit required to get the best deals.

The Bank of England's decision to keep rates on hold at 5% on Thursday will have done nothing to improve the lot of households struggling to fend off the lenders.